Disposable income
The amount left to the household once all credit charges are paid, weighed against family size. Two files with the same debt ratio can be judged very differently by this balance: a high-income household can bear higher debt. It is a key qualitative criterion in the lending decision.
Key points
- Monthly balance available after all credit charges, varying with household composition.
- Complements the debt ratio: a high-income household can borrow more at the same debt ratio.
- Each bank sets its own minimums, typically expressed per consumption unit.
- An insufficient disposable income can lead to rejection even if the debt ratio is met.
Frequently asked questions
How do banks calculate disposable income?
Banks subtract all credit charges (projected mortgage, ongoing consumer loans, alimony paid) from the household's net income to get gross disposable income. They then compare this to the number of consumption units in the household using each lender's own weighting. The minimum accepted threshold varies by bank and is not published.
Why can two borrowers with the same debt ratio be treated differently?
A household earning €8,000 net with a 35% debt ratio retains €5,200 disposable income, while a household earning €2,800 at the same ratio keeps only €1,820. The first can easily absorb unexpected costs; the second is more vulnerable. Banks therefore treat the absolute disposable income as a resilience indicator independent of the ratio.
What levers can be used to improve disposable income as presented to a bank?
Clearing a small consumer loan before submitting the application immediately frees up charges and improves disposable income without changing the debt ratio on the new loan. Including stable supplementary income (rents, recurring dividends) that the bank accepts also increases the numerator. The broker helps identify which income streams each lender will retain.
In practice
A couple with two children shows a 33% debt ratio on €4,500 net income: disposable income comes to €3,015, deemed sufficient by the bank, which would have rejected a single-parent household with the same income and charges because its disposable income per consumption unit would be too low.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- The annual percentage rate (APRC) · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr