Home loan
How much can you borrow?
Before you start viewing properties, know your real budget. The calculation follows the method French banks use: capped debt-to-income ratio, loan insurance included in the monthly payment, acquisition costs deducted from the price.
Counted at 70% by French banks, as applied in the calculation opposite.
Annual rate applied to the capital borrowed. For a young non-smoker it often falls below 0.20%.
Used to deduct acquisition costs from the financeable price: 7.5% on existing property, 2.5% on new build.
Amount you can borrow
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Indicative estimate based on the French HCSF method: capped debt-to-income ratio, loan insurance included in the monthly payment, rental income counted at 70%. Your bank remains the sole decision maker and applies its own residual income rules.
What the loan term changes
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Each bar is the total amount repaid to the bank over the term. At an identical monthly payment, a longer loan raises the capital you obtain, but the gold share grows faster than the blue one.
How is your borrowing capacity calculated?
The banking logic has three steps. First, eligible income: your net income plus rental income counted at 70%, because the bank provisions for vacancy and running costs. Then the maximum monthly payment: that income multiplied by the authorised debt-to-income ratio, usually 35%, minus the loan repayments you already carry.
Finally the capital. That maximum payment includes loan insurance, the very point most simulators skip, which distorts everything downstream. The insurance premium is therefore removed from the payment before the remainder is converted into capital, using the rate and the term. On an average file, ignoring insurance inflates the displayed capacity by 5 to 8%.
Borrowing capacity is not your purchase budget
The capital the bank lends you funds the property but also the acquisition costs, roughly 7.5% of the price on existing property and 2.5% on new build. To find the real price you can target, those costs must be taken out of the total envelope, deposit included. That is the "property price, costs deducted" line in the simulator.
What no formula captures: the stability of your income, what is left to live on once the payment is made, the emergency savings that survive the deposit. That is the analysis we carry out with you before a file is presented to a lender.
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