CIC opens the door to homeownership with its “Home Loan for New Ways of Working”: no permanent employment contract required
Published on 19/09/2024
Today’s labor market is very different from yesterday’s. Permanent employment contracts are no longer the sole norm. France has at least 4 million fixed-term, temporary, self-employed, seasonal, and performing arts contract workers.
French workers’ expectations have shifted. They appreciate the independence that these new forms of employment bring. Yet, not holding a permanent contract is still seen as a major barrier to homeownership, according to an exclusive IFOP survey for CIC1 of 2,000 French respondents (with and without permanent contracts).
As a benefit corporation (entreprise à mission), CIC is committed to making homeownership accessible to the widest population possible. That is why we are evolving our business model to reflect societal changes, by removing the permanent contract requirement for mortgages. Designed for loyal customers2 who do not have a permanent employment contract, the “Prêt Immo Nouvelles Formes d’Emploi” (Home Loan for New Ways of Working) lets them adjust their monthly repayments to variations in their income, with no fees or added paperwork.
“We live in a society of discontinuity. Our jobs, just like our private lives and our homes, are no longer continuous. In a society that values freedom, French people want to be able to choose their own hours, change jobs... basically, to be their own boss. For companies, banks included, the key challenge is to integrate this discontinuity into their business model,” notes Jean Viard, Sociologist and Research Director at CNRS and CEVIPOF (Sciences Po Paris’ Political Research Center).
“Homeownership is a goal for 70 % of people without a permanent contract and 78 % of people with a permanent contract, but all recognize that not having such a contract can be a major barrier to securing a mortgage. This leads to a form of self-censorship among those who do not. 75 % of the respondents to the survey said they would be very interested in a mortgage loan that would be tailored to their specific employment circumstances”, explains François Legrand, Director of Surveys at the IFOP market research and public opinion polling institute.
“A permanent contract is no longer the only gateway to obtaining a mortgage and becoming a homeowner. With the “Home Loan for New Ways of Working”, we are sending a clear message to our loyal customers. Guided by our mission-driven philosophy, this tailor-made solution supports them at one of the most important times of their lives. Securing a mortgage without a permanent employment contract was once the exception. Today, we want to make it the norm, by removing that barrier,” says Daniel Baal, Chairman of CIC.
Working without a permanent contract: a conscious and rewarding choice
82 % of French fixed-term, temporary, self-employed, seasonal and performing arts contract workers say their current professional status is a deliberate choice. Many of these workers appreciate their situation, citing a better quality of life and a greater sense of freedom than they would have if they were in permanent employment. However, preferences vary by category : while self-employed people are generally satisfied with their circumstances, a large proportion of people on fixed-term contracts would prefer to be in permanent employment if they had the opportunity.
The majority of respondents who are in these new forms of employment (58 %) said they were satisfied with their income. Almost half of the respondents (46 %) said their income can vary from month to month, prompting them to use effective budgeting strategies. More cautious than people on permanent contracts, they are more likely to set aside emergency savings to adapt to these fluctuations (+13 points vs. those on permanent contracts).
More than 8 in 10 people not on permanent contracts say they are disadvantaged in terms of mortgage access
The main issue lies in access to housing. People both without (70 %) and with (78 %) a permanent employment contract aspire to own a home, but all agree that it is very hard to secure a mortgage without a permanent contract. Just 46 % of non-permanent workers in France are homeowners, compared with 3 in 5 people (60 %) on permanent contracts.
More than 9 in 10 respondents (93 %) saw the absence of a permanent contract as a genuine obstacle when it comes to housing. This is a real consensus shared across the whole of society : people on permanent contracts (92 %), those who occupy new forms of employment (94 %), and probably also landlords, rental agencies, and even bankers !
What’s more, just 42 % of non-permanent workers have already applied for a mortgage (compared with 60 % of permanent workers). This self-censorship is especially pronounced among employees on fixed-term contracts (with just 36 % having applied for a mortgage) and temporary workers (35 %). The main reason ? 71 % of respondents who considered buying a home but did not apply for a mortgage cited their non-permanent employment status. Self-censorship is more common among people who do not have a permanent contract. This is hardly surprising when 82 % of non-permanent workers feel they are at a disadvantage compared with permanent workers when it comes to securing a mortgage.
1 IFOP X CIC survey conducted between August 28 and September 9, 2024 among 2,000 respondents with and without a permanent employment contract, representative of the French population using quota sampling.
2 Customers for at least three years, and provided that the borrower and/or co-borrower fall into at least one of the following categories : fixed-term employment, contract workers (without a permanent contract), seasonal workers, performing arts contract workers, the self-employed and freelancers.
3 SUBJECT TO CONDITIONS. All applications are reviewed and subject to approval by the Bank. Borrower cooling-off period : 10 days. Sale contingent upon loan approval. If the loan is not approved, the seller must refund any amounts already paid. For full terms and conditions, visit any CIC branch or www.cic.fr. Example : a “Home Loan for New Ways of Working” of €250,000 with a term of 240 months, at a fixed annual interest rate of 4 %. Repayment : 240 monthly installments of €1,514.95 (insurance not included), €2,500 lender arrangement fee, €1,442 mortgage registration fee. Total Amount Due : €371,788.79 (including/excluding mortgage protection insurance customarily offered). Fixed Annual Percentage Rate (APR) of 4.44 %. Cost of mortgage protection insurance customarily offered - covering death, total and irreversible loss of autonomy, work incapacity, and permanent disability : total amount of €6,701.52, based on a first monthly premium of €28.85, a maximum monthly premium of €31.43, and an effective annual insurance rate (APR) of 0.22 %. Subject to review and approval of your application. The insurance premium shown is indicative, in addition to your monthly mortgage payment, and is provided for a 30-year-old non-smoker working as a self-employed entertainment or recreational services manager. Premiums are adjusted each year according to the borrower’s age and remaining loan balance.