France's 35% debt-to-income rule: how much French banks let you borrow

US lenders weigh two ratios and a range of loan programs. In France, one number decides most home loans: the share of your income that all your loan payments would take. Knowing exactly what goes into it tells you how much you can borrow before you meet a bank.

The rule in one sentence

Since January 2022, French lenders have had to follow a rule set by the High Council for Financial Stability (Haut Conseil de stabilité financière, HCSF): a borrower's loan payments, borrower insurance included, may take at most 35% of their net income, and a home loan may last at most 25 years. The term can stretch to 27 years when repayments start later, for a new build or a purchase with works.

How the ratio is calculated

The debt-to-income ratio (taux d'endettement) is every monthly loan payment divided by net monthly income. The payments include the new home loan with its insurance, every loan you keep (car, consumer credit, a student loan) and any maintenance you pay. The rent you will stop paying, everyday spending, energy and property tax are not part of it.

Income means net income before income tax: salaries after social charges, pensions and other regular income. Lenders often count rental income at about 70%, to allow for empty months and costs, and may average or leave out bonuses and irregular earnings.

A worked example

Take a household with $5,000 of net income a month and a $250 car loan. 35% of $5,000 is $1,750, so after the car loan $1,500 a month is left for the home loan, insurance included.

At 3.5% over 25 years, with borrower insurance at 0.3% of the amount borrowed each year, that payment carries a loan of about $285,000. Over 20 years the same payment carries only about $248,000. Paying off the car loan first would lift the 25-year figure to about $333,000.

The 20% flexibility

The rule is not absolute. Each quarter, banks may grant up to 20% of their new home loans outside the two limits. At least 70% of that margin is reserved for people buying their main home, and at least 30% for first-time buyers. Banks decide who gets it, usually applicants whose savings or remaining income make the risk low, so it is a possibility, not something to plan on.

Remaining income still matters

Staying within 35% does not guarantee a loan. Lenders also look at the income left once every loan is paid (the reste à vivre). The same 35% leaves much more to live on with a high income than with a modest one, and a family of four needs more than a single person. Savings, job stability and how you manage your accounts weigh in too.

How to raise what you can borrow

Clear small loans first. Every monthly payment you already make comes straight off the 35%. Repaying a car or consumer loan before applying can add tens of thousands to the amount you can borrow.

Shop for borrower insurance. Because the insurance counts inside the 35%, a cheaper policy frees room for the loan. You can choose an insurer other than your bank, and since 2022 the Lemoine law lets you change insurer at any time during the loan.

Use the full term. Moving from 20 to 25 years raises the amount you can borrow, at the cost of more interest over the life of the loan.

Bring a contribution. Your own savings do not change the loan you can get, but they raise the price you can pay and usually cover the notary fees, which lenders like to see paid from savings. See French notary fees: how much to budget.

How it compares with the US

US lenders apply the 28/36 guideline, which counts property tax, home insurance and HOA dues in the housing payment and measures them against income before tax. The French rule leaves those costs out, counts borrower insurance instead, uses net income, and is a binding regulation rather than a guideline. The 28/36 rule guide explains the US version.

Work out your own figure with the France borrowing capacity calculator, which applies the 35% rule, insurance included, and the notary fees to give the price you can target.