Since February 1, 2016 the interest rate for the PEL savings plan (property purchase savings plan) savings plan has dropped from 2% to 1.5%. Note that for savings plans opened before this date the interest rate conditions have not changed.
The upside is that the lending rate for a PEL backed loan has been reduced to 2.7% excluding insurance, against 3.2% previously. While a PEL lending rate of 2.7% is currently higher than the average rate available (2.2% in December 2015), after a term of at least four years, this rate may be sufficiently low for it to become competitive if there is an increase in market interest rates. If, however, the lending rates remain low, borrowers may always choose not to use their PEL to take out a loan. In the future, the PEL may return to its original function: a savings plan to buy property. Generally PEL savings are used as a down payment (deposits are capped at €61,000).
It is possible, remember, to borrow €92,000 and the advantages acquired may be transferred to the savers parents or children. Borrowers taking out a mortgage to buy their main residence also benefit from a government bonus (€1000, or €1,525 for green housing).
For more information: Plan Epargne Logement.