First-time buyer: the complete guide to your first purchase

First-time buyer: what to check before your first purchase?

When you buy a home for the first time, the core question is always the same: is it smarter to buy or rent right now? There is no universal answer: it depends on your profile, your time horizon and a few key financial parameters. For a first-time buyer, three of them are critical: the loan rate (taux_pret), the notary fees (montant_fn) and the borrower insurance rate (taux_assurance).

This guide focuses on these three levers, with practical numerical examples, to help you compare buy or rent objectively. It is not personalised advice: all figures are indicative. For a view tailored to your case, use a dedicated simulator such as buy-or-rent.net or its French version acheter-ou-louer.com.

1. Loan rate (taux_pret): the engine of your credit cost

1.1 Where are mortgage rates for first-time buyers?

By late 2025, fixed mortgage rates over 20 years for solid first-time buyers in the euro area (France benchmark) are around 3.6%, with variations depending on income, down payment and job stability. A gap of just 0.5 percentage point can mean tens of thousands of euros over the life of the loan.

1.2 Concrete example: €250,000 borrowed over 20 years

Assume you target a first home at €270,000 (resale market) with €20,000 down and a €250,000 loan over 20 years (240 months). Here is the impact of taux_pret:

• At 3.1% (low scenario):
  • Monthly payment (without insurance) ≈ €1,390
  • Total interest ≈ €83,600
• At 3.6% (current average):
  • Monthly payment (without insurance) ≈ €1,450
  • Total interest ≈ €98,000
• At 4.1% (higher scenario):
  • Monthly payment (without insurance) ≈ €1,515
  • Total interest ≈ €113,600

Difference between 3.1% and 4.1%: about €125 more per month and roughly €30,000 more interest over 20 years.

1.3 Buy or rent: how to use taux_pret in the comparison?

Imagine the same home could be rented for €1,050 / month today. Your mortgage payment at 3.6% is €1,450 excluding insurance. You pay about €400 more per month than the rent.

The right question is not only “is €1,450 more than €1,050?” but: what happens to the €400 difference if you stay a tenant?

• Buy scenario: you pay €1,450 per month, part interest (pure cost) and part principal (building equity).
• Rent scenario: you pay €1,050 in rent and invest the €400 difference each month at an investment rate (for example 4% in diversified ETFs).

Over 10 years, €400 per month invested at 4% can grow to around €58,000. The buy or rent simulator compares this financial capital with the home equity you build by repaying the loan, with taux_pret fully integrated.

2. Montant_fn: notary fees, the often-overlooked entry cost

2.1 How much should a first-time buyer budget?

Notary fees (montant_fn) are not just the notary’s remuneration, but mainly taxes and administrative costs. In practice:

• Resale (existing homes): around 7–8% of the purchase price
• New builds: about 2–3%

For a first-time buyer with limited savings, this line item can delay the decision to buy or push you to keep renting for a few more years.

2.2 Numerical example: existing vs new build

Let’s stick to a budget of €270,000 for a first home.

• Existing home at €270,000
  • Notary fees at 7.5% ≈ €20,250
  • Montant_fn = €20,250
• New build at €270,000
  • Notary fees at 2.5% ≈ €6,750
  • Montant_fn = €6,750

Immediate cash difference: €13,500. For a first-time buyer this can mean:

• Either a larger or smaller down payment required
• Or the ability to finance renovation work or a better energy rating
• Or keeping a stronger emergency fund

2.3 Impact on the buy or rent decision

Notary fees are a non-recoverable entry cost in the short term. If you sell after 5 years, property price growth might not fully offset these €20,000 in the resale market.

Quick illustration:

• Home bought for €270,000 + €20,250 notary fees
• Sale 5 years later at €290,000 (+7.4% price increase)
• Gross capital gain: €20,000
• This gain barely covers the initial montant_fn

In such a scenario, if you had remained a tenant and invested your savings at a decent investment rate, a buy or rent simulator might show that renting was more efficient over 5 years. Over 15–20 years, however, the wealth effect of ownership can reverse that result. The key variable is your holding period.

3. Taux_assurance: the hidden cost of borrowing

3.1 Typical levels for borrower insurance

For a first-time buyer, the annual borrower insurance rate (taux_assurance) on the principal generally ranges between 0.25% and 0.45%, depending on age, health and whether you use the bank’s group policy or a delegated contract.

In the simulator, this appears as taux_assurance. Again, a 0.2-point gap over 20 or 25 years can add up to a substantial amount.

3.2 Example: insurance on €250,000

Loan: €250,000 over 20 years, taux_pret 3.6%.

• At 0.25% taux_assurance:
  • Theoretical annual cost ≈ €625
  • Total cost over 20 years ≈ €12,500 (simplified)
• At 0.45% taux_assurance:
  • Theoretical annual cost ≈ €1,125
  • Total cost over 20 years ≈ €22,500

Difference: about €10,000 over the life of the loan, equivalent to several months of rent. To decide whether to buy or rent, you must integrate this cost, not just the interest rate.

3.3 Effect on the total monthly payment

Back to our 3.6% example:

• Monthly payment without insurance ≈ €1,450
• Insurance at 0.25%: ≈ €52 / month
• Insurance at 0.45%: ≈ €94 / month

Your total monthly outlay therefore moves from:

• €1,502 (at 0.25%)
• to €1,544 (at 0.45%)

Against a €1,050 rent, the monthly gap is no longer €400, but between €452 and €494. The buy or rent simulator will use taux_assurance to compute your remaining saving capacity in the rent scenario.

4. Full scenario: first-time buyer vs investing tenant

4.1 Initial assumptions

Profile: first-time buyer couple, net income €3,800 / month, savings €30,000.

Option 1 – Buying a first home:

• Purchase price (existing home): €270,000
• Montant_fn: €20,250 (7.5%)
• Down payment used: €30,000 (fees + part of price)
• Loan: €260,250 over 20 years
• Taux_pret: 3.6%
• Taux_assurance: 0.30%

Option 2 – Remaining a tenant:

• Initial rent: €1,050 / month
• Annual rent increase: 2% / year (linked to rent index)
• Starting capital: €30,000 invested at 4% / year
• Monthly investment: difference between mortgage payment and rent

4.2 Quick calculation on the owner side

For simplicity, round the loan to €260,000.

• Monthly payment without insurance ≈ €1,510
• Insurance (0.30%) ≈ €65 / month
• Total monthly payment ≈ €1,575

Versus €1,050 rent, the immediate extra cost is €525 / month. But inside those €1,575:

• A share is principal repayment (home equity)
• Only interest + insurance + fees are pure cost

Over 10 years, you will have repaid roughly over €90,000 in principal (order of magnitude), while paying several tens of thousands in interest and insurance.

4.3 Quick calculation on the investing-tenant side

The tenant pays €1,050 rent in year 1, then rent increases by around 2% annually. At the same time:

• They invest their initial €30,000 at 4% / year
• They invest each month the difference between €1,575 and their rent

In year 1, this difference is €525 per month, then it slowly shrinks as rent rises. Over 10 years, with a 4% investment rate, their financial capital can reach between €120,000 and €150,000, depending on rent evolution and saving discipline.

The buy or rent simulator will then compare this financial capital to:

• Your home equity (estimated property value minus remaining loan)
• Minus costs: interest, montant_fn, taux_assurance, property tax, maintenance

In some paths, the owner wins; in others, the investing tenant does. It depends on holding period, property price growth and the balance between taux_pret and investment rate.

5. Three common traps for first-time buyers

5.1 Looking only at the monthly payment

Comparing “€1,575 mortgage” with “€1,050 rent” is not enough. You must factor in:

• Total loan cost (taux_pret)
• Insurance cost (taux_assurance)
• Montant_fn, which is largely sunk in the short term
• Other owner costs (property tax, repairs, service charges)

5.2 Underestimating montant_fn when you might move soon

If you expect to move again in 4–5 years, notary fees weigh heavily in the buy or rent comparison. A very mobile first-time buyer should test different holding periods in a simulator to see at what point buying starts outperforming renting.

5.3 Ignoring the leverage of borrower insurance

Many first-time buyers accept the bank’s insurance offer without shopping around. Yet cutting taux_assurance from 0.45% to 0.25% can:

• Lower your monthly payment by dozens of euros
• Improve your debt-to-income ratio
• Free up capacity to save or invest

In a structured buy or rent comparison, optimising both taux_pret and taux_assurance makes the “buy” scenario significantly stronger.

6. How to use a buy or rent simulator as a first-time buyer

6.1 Key parameters to enter

On a tool like buy-or-rent.net (or acheter-ou-louer.com), focus on:

• Taux_pret: your mortgage offer rate (e.g. 3.6%)
• Montant_fn: precise or estimated notary fees (7–8% resale, 2–3% new)
• Taux_assurance: annual borrower insurance rate (e.g. 0.30%)
• Your current rent and expected annual increase (linked to rent index or inflation)
• The investment rate you could realistically get on your savings if renting

6.2 Testing multiple scenarios

For a first-time buyer, the value of a buy or rent calculator is to play with:

• Short (5–7 years) vs long (15–20 years) holding period
• 0.5-point changes in taux_pret
• Different taux_assurance levels via bank vs external insurance
• New build (lower montant_fn) vs existing home

You will often find that the answer to “should I buy or rent?” flips depending on these assumptions.

7. Conclusion: three key levers for a first-time buyer

As a first-time buyer, your decision to buy or rent largely hinges on:

• Taux_pret: the lower it is, the more competitive buying becomes compared with renting
• Montant_fn: the shorter your horizon, the more it hurts the buy scenario
• Taux_assurance: a frequently overlooked lever that can save you many thousands of euros

This guide gives you indicative orders of magnitude, but it is not personalised financial advice. Your own situation (job stability, life plans, risk tolerance, saving capacity) is crucial to decide whether you should buy or rent at a given moment.

To make an informed choice and compare both paths in detail, with taux_pret, montant_fn and taux_assurance fully accounted for, simulate your situation on buy-or-rent.net.