A mortgage commits you for a long period, often twenty years or more. Its financing structure relies on several mechanisms that, taken together, determine the total cost of the loan and whether the project is viable. Understanding these mechanisms before approaching a bank can save time and help avoid roadblocks along the way.
Usury rate and APR: the cap that can block a mortgage application
The APR (annual percentage rate) includes the loan’s nominal interest rate, the cost of borrower insurance, application fees and guarantee fees. This single rate provides a basis for comparing two bank offers, and it is the rate that regulators compare with the usury rate.
The usury rate is the legal cap above which a bank cannot lend. For loans of twenty years or more, this cap was set at 5.40% for the fourth quarter of 2026. An application can therefore meet the 35% debt-to-income rule and still be blocked because its APR exceeds this threshold.
Borrowers most at risk include those whose insurance costs more, particularly people over forty or those with health risks. In these cases, insurance can account for enough of the APR to push it over the limit, even when the nominal interest rate is reasonable.
To optimise your mortgage financing, taking out insurance through a provider other than the bank remains a practical option: choosing an external policy can often reduce the APR by several tenths of a percentage point.
The 35% debt-to-income rule: what the HCSF requires of banks
The High Council for Financial Stability (HCSF) maintains two safeguards that apply to all mortgage arrangements. The debt-to-income ratio must not exceed 35% of net income, including insurance. The loan term is generally limited to twenty-five years.
These criteria cannot be negotiated on a case-by-case basis. Banks have some leeway to grant exceptions for a portion of their lending, but this flexibility is regulated and does not constitute an individual right.
How to calculate your actual debt-to-income ratio
The calculation includes all existing loan payments (car loans, consumer credit) as well as the future monthly mortgage payment. A consumer loan costing a few hundred euros a month may be enough to push the ratio above the threshold.
- Add up all monthly loan payments, including the future mortgage and its insurance
- Divide this total by the household’s monthly net income (salaries, recurring rental income, pensions)
- Multiply by one hundred to get the debt-to-income percentage
Paying off a small loan before submitting a mortgage application can bring your debt-to-income ratio below the limit without changing your project or income.
Down payment and supplementary loans: building a solid financing plan
A down payment consists of funds available without borrowing: savings, a home savings plan, a gift or proceeds from a sale. Banks generally expect a down payment of 10% to 20% of the property’s price, intended to cover at least the notary and guarantee fees.
Financing a purchase without a down payment is not prohibited, but it remains uncommon. Lenders approve it for applicants with stable incomes, impeccable banking records and a demonstrated ability to save in the future.
PTZ and supplementary zero-interest loans
The Zero-Interest Loan (PTZ) can finance part of a purchase of a new-build property and, subject to renovation requirements, an older property. It does not replace a main mortgage; it supplements it. Its direct benefit: it reduces the amount borrowed at the market rate, thereby lowering the total cost of credit.
Some banks also offer supplementary zero-interest loans separate from the regulated PTZ. These offers vary from one lender to another and are worth comparing with the main mortgage offer, as they affect the overall structure of the financing plan.
Comparing mortgage offers: APR, term and total cost
Advertised rates vary depending on brokers, banks and the details of the application. Relying on an average rate published in the press gives you a general trend, not a reliable indication for a specific project.
A useful comparison is based on three concrete factors:
- The APR for each offer, which includes all fees and allows for a direct comparison
- The total cost of the loan over its full term, expressed in euros, which reveals the actual difference between two offers
- Early repayment terms (penalties, payment holidays, flexibility to adjust monthly payments)
A difference of a few tenths of a percentage point in the nominal rate can amount to several thousand euros over twenty years. Comparing at least three offers dated within the same month remains the most reliable way to identify the least expensive option.
The broker’s role in negotiations
A mortgage broker negotiates with several banks at the same time. Their involvement does not guarantee a better rate, but it speeds up the comparison process and may secure terms borrowers could not obtain on their own, particularly for insurance or application fees.
The broker’s fee (a mandate fee or commission paid by the bank) must be included in the APR. This additional cost should be weighed against the actual savings achieved on the loan.
A mortgage arrangement depends on balancing the debt-to-income ratio, down payment, loan term and insurance costs. Each factor affects the others, making a personalised simulation more useful than any general rate table. Before signing, check that the APR is below the current usury rate to avoid an unpleasant surprise when the final loan offer arrives.
