Borrowing capacity in France 2026: the HCSF 35% rule

The HCSF decision in force

On 29 September 2021, the Haut Conseil de stabilité financière (HCSF, France’s macroprudential authority), acting under article L. 631-2-1 of the code monétaire et financier (Monetary and Financial Code), adopted decision D-HCSF-2021-7 “on the conditions for granting home loans”, applicable from 1 January 2022. It made binding two rules that had until then been mere recommendations (2019, then January 2021).

Two decisions have amended it since:

• D-HCSF-2023-2 of 29 June 2023: it lowers from 80% to 70% the share of the flexibility margin reserved for main residences, which frees up 6% of lending instead of 4%.
• D-HCSF-2023-6 of 18 December 2023 (published in the Journal officiel (official gazette) on 24 December 2023), in force since 1 January 2024. It lowers from 25% to 10% the minimum share of works that gives entitlement to a deferral. It also removes from the debt-to-income calculation any prêt relais (bridging loan) whose loan-to-value ratio does not exceed 80%.

The HCSF’s official page mentions no later decision. It still publishes the quarterly monitoring of the flexibility margin, up to the second quarter of 2026.

The debt-to-income ratio: 35%, insurance included

The calculation. The taux d’effort (debt-to-income ratio) is total annual borrowing costs divided by annual income.

• In the numerator, all loan repayments: capital, interest and borrower insurance, where the loan is conditional on it (HCSF FAQ, question 12). The loan applied for is added to any loans already outstanding.
• In the denominator, the net income before tax of the borrower or household, within the meaning of articles 156 and 156 bis of the code général des impôts (General Tax Code). Flat-rate allowances are added back and exceptional income is excluded (question 13).

Rental income. It counts gross, with a discount set by the bank. The “differential” method, which deducts rental income from the repayments, is excluded (question 17).

Over the whole term. The debt-to-income ratio is not measured only in the first year. For each year of the loan, the charges are compared with the income established when the loan is granted, and it is the maximum that counts (question 20). With smoothed or stepped repayments, the worst year decides.

The term: 25 years, or 27 with a deferral

The maximum term is 25 years. It runs from the first drawdown to the last repayment, deferral included (question 23).

A total term of 27 years is allowed if amortisation does not exceed 25 years and if moving in is delayed relative to the loan (question 24): for example, a 2-year deferral followed by 25 years of amortisation, or 3 then 24. This applies to:

• the purchase or construction of a new-build home (VEFA, i.e. off-plan sale; individual house-building contract; property development contract);
• the purchase of an existing property with works amounting to at least 10% of the total cost of the transaction (25% before 1 January 2024).

The flexibility margin: 20% of loans

A bank may depart from both criteria for up to 20% of its quarterly mortgage lending (question 27). Within this margin:

• at least 70% must go to the purchase of a main residence;
• at least 30% must go to first-time buyers (this 30% is included in the 70%);
• the remainder, i.e. 6% of lending, is unrestricted.

How this margin is used is left to each bank’s discretion: none is obliged to grant a derogation.

The repayment formula

For a loan with constant repayments, with capital C, nominal annual rate r and n monthly payments:

M = C × i / (1 − (1 + i)^(−n)), where i = r / 12

Conversely, the borrowing capacity for a given monthly repayment M is:

C = M × (1 − (1 + i)^(−n)) / i

These two formulas are mathematical identities of constant-repayment amortisation. Calculating the periodic rate by simply dividing the annual rate by 12 (proportional rate) is the calculation convention adopted by Payotte; it is not a rule laid down by any legal text.

Amounts for net incomes of €2,000 to €6,000, over 15, 20 and 25 years, are in our borrowing capacity calculator (in French).

Step-by-step example (net income before tax of €4,000/month, no other loans):

1. Maximum monthly repayment: 4,000 × 35% = €1,400, insurance included.
2. Reference rate: 3.32%, the average rate on new home loans (excluding renegotiations) in August 2026, published by the Banque de France on 6 October 2026. This rate is excluding fees and insurance.
3. Over 25 years (n = 300), if the entire repayment went to interest and capital: C ≈ €285,120. Over 20 years: ≈ €245,290.
4. In practice, the monthly insurance premium must be deducted from the €1,400. The capital is therefore lower.