35 % debt ratio: HCSF rules for borrowing

In practice, the 35 % debt ratio corresponds to the debt-service limit adopted by the High Council for Financial Stability for granting a mortgage. This limit covers all household loans, is calculated on net income before tax and includes loan insurance. For a household receiving €3,000 per month, this represents a maximum of €1,050 in monthly repayments, for all loans combined, including insurance.

This rule does not mean that no application can exceed this threshold. The French framework provides banks with a flexibility margin while maintaining prudent regulation. If you are considering buying a house or flat on the Alabaster Coast, it is therefore useful to understand exactly what this cap covers, whom it applies to and in which cases a loan may still be granted above it.

Key points to remember

• The HCSF standard sets a debt-service ratio not exceeding 35 % of the household’s income, net before tax, taking all loans into account and including borrower insurance.
• Calculation example: with €3,000 in monthly income, the total monthly loan repayments must not exceed €1,050.
• Bridging loans are excluded from this calculation if their amount does not exceed 80% of the value of the property being sold, less, where applicable, the outstanding capital on the existing loan secured on that property.
• The loan term is limited to 25 years; it can be extended to 27 years when moving into the property is delayed: off-plan purchase, construction, or purchase of an existing property with works representing at least 10 % of the total cost of the transaction.
• Banks have a flexibility margin capped at 20% of their lending; in 2025, average usage reached 16.6%.

What the 35% rule exactly covers

The best-known rule is simple in principle: the household’s total loan repayments (the new mortgage and existing loans, whatever their nature), including borrower insurance, must not exceed 35 % of its net income before tax. In other words, it is not only the monthly capital and interest payment that is considered, but the full monthly payment.

This limit is often called, in everyday language, the “debt-to-income ratio”. The Banque de France also uses the expression “origination debt-service ratio” in its analysis of housing finance in 2025. The idea remains the same: to prevent a household from devoting too large a proportion of its income to repaying its loans.

According to the Banque de France, this prudential framework remains central to housing finance. In 2025, the average debt-service ratio observed when loans were granted was 30.4 %, showing that the loans granted remain, on average, below the cap.

Which loans and which households are concerned

The rule concerns the granting of mortgage loans. It falls within the general framework of housing finance in France. For an individual, this therefore most often concerns a project financed by a loan falling within this scope.

The calculation is made at the level of the borrowing household, based on its net income before tax; exceptional income, which does not constitute a stable and recurring resource, is excluded. The bank also examines the borrower’s overall creditworthiness. This is why two applications with the same overall income may be assessed differently depending on their structure, outgoings and the stability of their circumstances.

The 35 % threshold is a standard imposed on banks throughout France, with the sole possibility of derogating within the limits of their flexibility margin; its practical application then depends on the application submitted and the lending institution’s assessment.

How to interpret this threshold in practical terms

A simple calculation helps put things into perspective: for €3,000 in monthly income, 35% corresponds to €1,050 per month. This amount covers all the household's monthly loan repayments, including borrower insurance.

This ceiling alone does not indicate how much you can borrow. The amount that can be financed also depends on:

• of the loan term,
• the rate applied by the bank,
• the cost of insurance,
• and the overall assessment of your solvency.

In other words, two households with the same theoretical maximum monthly payment will not necessarily be offered the same loan amount. The 35% rule sets a limit that the bank must comply with, outside its flexibility margin, but it does not replace the lender's full assessment of the application.

Cases where the cap may be exceeded

The 35 % threshold does not absolutely prohibit any excess. The Banque de France points out that banks have a flexibility margin. This margin is capped at 20 % of their lending production.

In 2025, the average use of this margin reached 16.6%, therefore below the authorised ceiling. At the same time, the proportion of loans exceeding a debt-service ratio of 35% remained contained at 16.2%, compared with 27.9% in 2020. These figures show two things:

• the threshold is indeed exceeded in practice;
• it remains regulated and does not concern the majority of cases.

This margin, calculated on each bank's quarterly production of new loans, must be reserved at least 70% for buyers of their main residence. A common misconception should also be avoided: exceeding 35% does not create an entitlement to a loan. It simply means that the bank may still lend within a limited proportion of its production, if it considers the application acceptable in light of its lending policy.

For a borderline case, speaking with the bank or, if necessary, a legal or accounting professional can help assess the project’s actual feasibility.

The special treatment of bridging loans

One point that is often misunderstood concerns bridging loans. According to the HCSF, they are excluded from the calculation of the 35 % debt-service ratio subject to one precise condition: their financing ratio, i.e. the ratio between the amount of the bridging loan and the value of the property being sold (less, where applicable, the outstanding capital on the existing loan secured against that property), must not exceed 80 %.

This exception is important for owners who buy before finalising the sale of their current home. If the bridging loan remains within this limit of 80% of the value of the property put up for sale, it is not included in the calculation of the 35% debt-service ratio.

Conversely, if this condition is not met, this exclusion cannot be applied automatically. This is therefore something to check at a very early stage when putting the application together, as it may significantly change the assessment of your borrowing capacity.

The maximum term and eligibility for 27 years

The HCSF framework also limits the loan term to 25 years. When moving into the property is delayed (off-plan purchase under VEFA, construction, or purchase of an existing property with a programme of works), a repayment deferral equivalent to this delay is permitted, up to a total term of 27 years and a repayment period of 25 years. For existing properties, since the decision of 18 December 2023 (in force from 1 January 2024), the works must represent at least 10 % of the total cost of the transaction, compared with 25 % previously.

Eligible works may include:

• modernisation works,
• sanitation,
• fitting-out,
• or energy renovation.

Before this change, the works had to represent at least 25% of the total cost of the transaction to qualify for a 27-year term for an existing property. The change is therefore significant for buyers considering a property with a more modest renovation budget.

In 2025, the proportion of loans with a term of more than 25 years remained limited to 7.0%. Here again, it is important to distinguish between legal possibility and banking practice: extended terms exist, but remain regulated and linked to delayed occupation of the property: off-plan purchase, construction, or works meeting the 10% condition for older properties.

What the recent housing credit figures show

Data published by the Banque de France show a housing credit market undergoing normalisation in 2025, with lending of 171.3 Md€ over the year. The average maturity at origination was 22.4 years, and the average loan amount at origination was €193,948.

These figures are not intended to predict your financing, but they shed light on the context in which banks apply the HCSF standard. The market has recovered, without any marked relaxation of lending criteria. The logic therefore remains the same: assess solvency, maintain prudent safeguards, and use flexibility only within a limited envelope.

The most common mistakes to avoid

The first mistake is to believe that 35 % is a target to reach. In reality, it is a prudential limit. Many financed applications are below this level.

The second is to leave borrower insurance out of the calculation. The 35 % threshold is assessed including insurance. An application that appears to pass without insurance may therefore no longer pass once it is added.

The third is to think that a slight excess will necessarily be accepted. The flexibility margin exists, but is limited to 20 % of banks’ lending. It is therefore neither automatic nor permanently available to all profiles.

Finally, some sellers or buyers reason solely in terms of the purchase price, whereas the feasibility of financing depends first and foremost on the monthly payment and the structure of the application. If you are considering a sale before embarking on a new project, a free valuation of your property may also help clarify the potential role of a bridging loan in the transaction.

In Veules-les-Roses, Cabinet Soudey offers country houses, longères, thatched cottages and flats for sale, while the rental management service with PCG Gestion concerns homes rented year-round, not holiday rentals.

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