Payment-shock ratio
The gap between the borrower's current housing cost (rent or existing installment) and the future loan installment. A contained payment shock reassures the bank about the project's sustainability, especially for a first-time buyer. It is a qualitative criterion often decisive beyond the debt ratio alone.
Key points
- Gap between the borrower's current housing cost and the future loan instalment.
- A high positive payment shock signals a risk of not adapting to the new budget effort.
- Particularly scrutinised for first-time buyers moving from a low rent to a high instalment.
- Qualitative criterion complementary to the debt ratio in bank analysis.
Frequently asked questions
How does payment shock influence the bank's decision?
A borrower paying €600 rent and committing to a €1,200 instalment shows 100% payment shock, even if their debt ratio stays below 35%. Credit analysts consider this profile riskier because the borrower has never demonstrated an ability to sustain this level of expense. A track record of regular savings can mitigate this risk.
What is the difference between payment shock and debt ratio?
The debt ratio measures the share of credit charges in gross income, regardless of the past situation. Payment shock measures the change in housing effort between today and tomorrow. A file can comply with the 35% HCSF norm while showing a worrying payment shock, which justifies additional analysis by the broker.
How can the broker neutralise an unfavourable payment shock?
Several levers are available: extending the term to reduce the instalment, mobilising additional contribution to lower the borrowed capital, or documenting the client's savings history as proof of adaptability. The broker can also target banks whose analysis framework includes greater tolerance for first-time buyers with strong income growth trajectories.
In practice
A 28-year-old first-time buyer pays €650 rent and applies for a loan generating a €1,150 instalment, a payment shock of 77%. The broker accompanies the file with an explanatory note highlighting three years of regular saving and documented salary progression, leading the bank to grant a derogation.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- Obtaining a mortgage loan · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr