Bridging loan in France: term, ratio, rate cap, HCSF

What a bridging loan is

The law defines it as “a credit of limited duration intended to make a partial or total, temporary advance of the proceeds of the sale of a property in order to acquire another before the sale of the first property” (Consumer Code, art. L311-1, 16°). The ANIL (Agence nationale pour l’information sur le logement, national housing information agency) describes it as a short-term transitional loan offered to owners who want to buy before they have sold.

The principle is simple: the bank lends you part of the estimated value of your current property; you undertake to put it up for sale, and the sale price repays the bridging loan.

Term and loan ratio: what the official sources say

Term. The code does not set a figure: it refers to a credit “of limited duration”. The ANIL’s 2008 study describes a loan “of short duration, two years at most”, to which a pre-financing period of up to two years can be added when it finances the construction of a home.

Loan ratio. The amount lent is lower than the presumed value of the property: according to the same ANIL study, it represents “generally at most 80%” of that value. The value is set on the basis of a valuation, most often by estate agents, accepted by the lender. This margin protects the bank against overvaluation and leaves the seller room to lower the price: even if sold for less than hoped, the property should still be enough to repay the loan.

The usury rate for bridging loans

The Banque de France publishes each quarter a usury rate specific to bridging loans, within the category of property loans. From 1 October to 31 December 2026:

The usury rate is the legal maximum rate a lender may charge: the taux annuel effectif global (annual percentage rate of charge) of a bridging loan cannot exceed 6.49% from 1 October to 31 December 2026. It is recalculated every quarter.

Bridging loans and the HCSF rules

Since 1 January 2022, the Haut Conseil de stabilité financière has required banks to meet two cumulative criteria: a borrower debt-to-income ratio that does not exceed 35% and a loan term that does not exceed 25 years (decision of 29 September 2021, art. 1).

The bridging loan is treated separately in two respects:

• it is not itself subject to the decision: article 3 excludes from its scope “bridging loans as defined in 16° of article L. 311-1 of the Consumer Code”;
• its repayments are excluded from the debt-to-income ratio of the main loan, since 1 January 2024, where its loan ratio is 80% or less (article 4 bis, inserted by the decision of 18 December 2023).

Article 4 bis defines the loan ratio as “the ratio between the amount of the bridging loan and the value of the property put up for sale, net, where applicable, of the capital still owed on the loan outstanding on the property”. The capital still owed on the property being sold therefore reduces the basis of calculation.

The real risk: not selling in time

The ANIL analysed this risk when the market turned in 2008: when sale times lengthen, the borrower sometimes has to lower the price to sell within the term of the loan. It also pointed out that the cost of the bridging loan must be part of the reasoning. Its example, based on the conditions of the time: for a property valued at €200,000 and a bridging loan of €160,000 at 5%, annual interest comes to €8,000. Accepting a price cut of €8,000 straight away therefore amounts to the same as selling after a year at the original price, “provided a buyer can then be found at that price”. It added that a 25% gap between two valuations of the same property “is not exceptional”. Finally, the ANIL noted that the lender has no way of forcing the borrower to lower the price.

Which professional to consult

The courtier en crédit (mortgage broker) compares bridging loan offers and checks that the arrangement respects the 80% threshold that takes its repayments out of the debt-to-income ratio. The agent immobilier (estate agent) carries out the valuation on which the loan ratio is based: a realistic valuation reduces the risk of having to lower the price at the end of the loan.