HCSF (financial-stability board)
Haut Conseil de Stabilité Financière: the authority that sets prudential rules framing mortgage lending, notably the 35% debt cap and the 25-year maximum term. These norms, now binding, structure the analysis of every file. A derogation margin is allowed for a fraction of lending.
Key points
- Caps the debt ratio at 35% of net pre-tax income, including borrower insurance.
- Sets the maximum mortgage term at 25 years (27 years for new builds with deferred amortisation).
- Grants banks a limited derogation margin to finance out-of-norm profiles.
- Its recommendations became legally binding from 2021.
Frequently asked questions
How does the HCSF derogation margin work and how can it be obtained?
Banks can derogate from HCSF norms for a set percentage of their quarterly lending, with priority given to first-time buyers and primary residences. The broker maximises chances by building an exceptionally strong file: stable and growing income, positive net worth, no overly tight residual income. Banks only grant derogations to profiles whose quality they are confident in.
Why does the HCSF include borrower insurance in the debt ratio calculation?
Including borrower insurance in the calculation gives a truer picture of the actual charge borne by the borrower. Before this change, some files met the debt threshold on capital alone but became stretched once insurance was added. The HCSF wanted to eliminate this blind spot to prevent underestimated financial fragility situations.
What is the difference between HCSF norms and banks' internal criteria?
HCSF norms are a binding regulatory floor: no bank can ignore them. But banks can apply stricter internal criteria according to their risk policy: some cap the debt ratio at 33% internally, others are more demanding on residual income or employment stability. The broker exploits these policy differences to direct each file to the most suitable bank.
In practice
A couple earns €5,200 net per month. With the HCSF norm at 35%, their maximum repayment capacity (insurance included) is €1,820 per month. If borrower insurance represents €80, the instalment excluding insurance cannot exceed €1,740, which determines the maximum borrowable capital based on term and rate.
Official sources
- High Council for Financial Stability (HCSF) · Ministère de l'Économie
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)