Mortgage loans: including disposable income would make financing available to nearly 34.000 households each year

The result is a strong finding: according to data from more than 745.000 annual simulations processed by Pretto, nearly 34.000 households currently unable to obtain financing could regain access to mortgage credit each year, even though an examination of their remaining income demonstrates that they are already able to absorb the burden.

When extrapolated to the entire French market, the potential amounts to approximately 40.000 additional households per year.

A proposed law that addresses a well-identified rigidity in the HCSF system

Since January 1, 2022, banks have been required to adhere to a maximum debt-to-income ratio of 35% and a maximum loan term of 25 years, except within a limited allowance of 20% of their quarterly production (source: HCSF decisions, updated 2024). This uniform rule applies without considering the borrower's disposable income, even though this indicator is among the traditional tools for assessing creditworthiness in banking practice.

The bill tabled by Lionel Causse, co-signed by about ten parliamentarians, would authorize banks to deviate from the 35% rule when they can demonstrate, on the basis of the applicant's remaining living expenses, the absence of a risk of excessive debt.

Pretto, one of the leading mortgage brokers in France, welcomes this initiative and today provides some figures to measure its concrete impact.

Households excluded from credit even though they remain creditworthy

The analysis of the files processed by Pretto reveals a finding that directly questions the relevance of the current rule: households classified as unfinanceable retain a median living allowance that remains comfortable in view of usual banking standards, estimated at around €1000 per adult and €500-600 per child.

In concrete terms: a single person currently unable to obtain financing has, after repaying the estimated monthly payment, a median disposable income of €1.759. They already live comfortably without the loan and are therefore able to absorb its burden. This reality, multiplied by the volume of cases concerned, illustrates the massive exclusionary effect produced by the uniform application of the 35% rule.

More broadly, analysis of the Pretto database shows that 27% of tenants assisted by Pretto who obtained financing benefit from a mortgage payment equal to or lower than their previous rent (sample of 15.052 financed tenant projects). This raw figure, however, needs to be qualified: a mortgage payment does not include the costs associated with homeownership (property tax, maintenance, potential loss of housing benefits). When factoring in an estimated additional cost of ownership of between 10% and 20%, the proportion of these borrowers rises to around 17%. For this significant fraction of borrowers, the transition from renting to owning does not create a new expense: it is simply a substitution. The 35% rule, which assesses the gross financial outlay rather than the overall financial situation, therefore excludes applicants whose monthly expenses would have been comparable to, or even lower than, their current rent.

This observation is shared by specialist lawyers.

Beyond the operational implications, the proposed law aligns with the analyses put forward by several legal experts specializing in banking law. In an opinion piece published by Pretto, Laurent Denis, a lawyer specializing in banking and insurance law, points out that the HCSF's measures, which became legally binding on January 1, 2022, are based on rarely explained economic principles and lead to the exclusion from credit of borrowers who are "perfectly creditworthy from a banking perspective and eligible for mortgage loans under consumer law."

The lawyer points out that French mortgage law has historically not established any rigid ratios. It assesses the borrower's creditworthiness based on proven technical criteria, and related litigation remains minimal.

Several macroeconomic indicators also call into question the relevance of maintaining the current system unchanged. The overall debt ratio of French households decreased between 2019 and 2024, falling from 98,99% to 90,94% of gross disposable income (source: ECB-Eurostat). Outstanding mortgage loans to households have stagnated for two years at €1.283 billion (source: Banque de France, 2025). Monthly lending has fallen from €38 billion in January 2017 to approximately €12 billion at the end of 2025.

A measure that usefully complements the existing arsenal

The 20% overdraft facility already available to banks, while helpful, is insufficient to rectify the situation. According to the HCSF's 2025 annual report, 17,1% of loans exceeded at least one of the two thresholds at the end of 2025, with a ceiling set at 20%. The remaining margin is neither systematic nor transparent for borrowers: its use varies from one bank branch to another, without visibility or consistency. Rental property investors are particularly penalized: of the 6% of total production theoretically accessible to them through this facility, only 3,5% is actually used.

Enshrining disposable income in law would provide the market with a clearer, fairer, and more suitable framework for the diverse financial situations of French households. It would also provide banks with greater security by giving them a clear legal basis to distinguish between a genuinely risky overdraft of 35% and one that is perfectly manageable in relation to disposable income.

According to Pierre Chapon, CEO and co-founder: “Including disposable income in law reinstates an indicator that banks are perfectly familiar with and were already using before 2022. This is not a blind relaxation of the rules; it is a precise measure that would allow tens of thousands of households, having made the right choices, with a down payment, stable income, and a controlled budget, to regain access to credit after several years of exclusion.”

Methodological note

The study is based on Pretto's internal data, observed over a rolling 12-month period. It aims to measure two indicators that are currently poorly documented at the national level: the disposable income of households whose mortgage applications are rejected under the 35% rule, and the proportion of tenants for whom homeownership represents an expense equal to or less than their current rent.

Illustrative image of the article via Depositphotos.com.