Borrowing capacity
The maximum a household can borrow given its income, charges, contribution, rate and term, within the accepted debt ratio. It is computed backwards from the affordable installment. Establishing it early frames the property search and avoids targeting out-of-reach homes.
Key points
- The maximum amount borrowable given income, charges, contribution, rate and term.
- It is computed backwards, from the affordable installment.
- Establishing it early frames the property search.
- It depends directly on the accepted debt ratio and the term.
Frequently asked questions
How do you estimate borrowing capacity?
You start from the maximum installment (income × accepted debt ratio − existing credit charges), then derive the borrowable capital from the rate and term. Lengthening the term raises the accessible capital but increases the total cost; that is the central trade-off of the structure.
Does a personal contribution increase borrowing capacity?
A contribution does not change the affordable installment, but it reduces the capital to borrow and funds the costs (notary, guarantee). Above all it improves acceptance and the offered rate, because it reassures the bank about saving ability and lowers its risk.
Why calculate your capacity before viewing?
To target genuinely financeable properties and negotiate from strength with a clear budget. A buyer who knows their capacity avoids out-of-budget impulses and preliminary contracts signed without financing certainty, the leading cause of failed sales.
In practice
With €4,500 income and no current loan, a 35% installment cap gives about €1,575, i.e. nearly €300,000 borrowable over 25 years at a common rate, excluding contribution and fees.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- I want to obtain a mortgage · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr