Borrowing capacity 2026: how to work out your new-build property budget

Published on September 19, 2026 · Financing

Family preparing financing for their new-build purchase

Thinking of buying a new property in 2026? Before setting your sights on a scheme or visiting show homes, one essential question should concern you: how much can you actually borrow? Your borrowing capacity shapes your entire purchase journey, from choosing the property to negotiating with your bank. At JL HOME, we help first-time buyers and investors see clearly on this crucial point every day.

What is borrowing capacity?

Borrowing capacity is the maximum amount a bank agrees to lend you to finance your property project. This amount is not determined by your wishes alone: it results from the combination of several objective criteria that lenders assess rigorously.

Your borrowing capacity depends essentially on:

Your monthly net income (salaries, rental income, pensions, etc.)
Your existing monthly outgoings (other loans, maintenance payments)
Your personal contribution (savings, gift, inheritance)
Your maximum permitted debt-to-income ratio
The loan term you envisage (15, 20, 25 years…)
Market conditions (current mortgage interest rates)

It is the combination of all these elements that forms your "real capacity".

The debt ratio: the fundamental rule

The debt ratio is the key indicator that banks scrutinise in 2026. It is the ratio between your monthly loan repayments and your monthly net income.

The usual banking standard: your debt ratio should not exceed 35 % of your net income. This means that if you earn 3 000 € net per month, your loan repayments (including the future mortgage) should not exceed 1 050 € per month.

Some banks occasionally accept ratios up to 40–45 %, in particular:

If you have a substantial personal contribution (above 20–30 %)
If your income is stable and documented (CDI, public sector)
If you are still young with clear career prospects

But be aware: exceed this threshold and you risk outright refusal, or less attractive financing terms.

A simple formula for calculating your borrowing capacity

Step 1: calculate your monthly debt capacity

Monthly net income × 35 % = Maximum debt capacity

Example: You earn 2 500 € net per month.

2 500 € × 35 % = 875 € maximum in monthly loan payments.

Step 2: Deduct your existing charges

Maximum debt capacity − Current monthly charges = Capacity for the property loan

Example (continued): You currently have a car loan of 250 € per month.

875 € − 250 € = 625 € available for the property loan repayment.

Step 3: Convert this monthly payment into a borrowable amount

The amount you can borrow depends on the interest rate and the loan term. This is where the amortisation calculation comes in.

Quick approximation: with an average rate of 3,5 % and a term of 25 years, a monthly payment of 1 € corresponds to a loan of roughly 215 €.

So, with 625 € available:

625 € × 215 ≈ 134 375 € borrowable (approximation).

This amount is in addition to your personal contribution. If you have 30 000 € in savings, your total budget would be roughly 164 375 €.

Important: This formula is an estimate. The actual interest rate, compulsory insurance and specific bank conditions may cause this calculation to vary. Consult your adviser or use a simulator to refine this estimate.

The variables that affect your borrowing capacity

1. The loan term

The longer the term, the lower the monthly payment and the higher your borrowing capacity. However, you pay more interest overall.

Term	Effect on monthly payment	Effect on interest
15 years	High monthly payment	Reduced interest
20 years	Moderate monthly payment	Average interest
25 years	Low monthly payment	High interest
30 years	Very low monthly payment	Very high interest

In 2026, most first-time buyers opt for 20–25 years to strike a balance between an affordable monthly payment and the overall cost.

2. The interest rate

The rate on your loan depends on:

The policy of the banks (which varies between institutions)
Your borrower profile (better rates for a strong profile)
Your personal contribution (a larger contribution means a better rate)
The key interest rates of the European Central Bank

A difference of 0,5 % in the rate has a significant impact on your monthly payment and therefore on your capacity.

To be checked with your bank in 2026.

3. Your personal contribution

The larger your contribution, the better:

Banks more readily lend when you put in your own money (a contribution of 20–30 % is a good benchmark).
You often obtain more favourable terms.
You borrow less, so your monthly payments fall.

4. Your borrower profile

The lending market distinguishes between profiles:

Very good profile: CDI for several years, stable sector, no consumer credit, significant contribution. Banks compete for you.
Good profile: CDI, some existing charges, adequate contribution. Access to credit is made easier.
Atypical profile: freelance, self-employed professional, recently CDI, sole trader. The file takes longer to put together and requires more documentation.

An atypical profile does not close doors to you, but you need to plan earlier and be more persuasive.

Real-life example: first-time buying couple in 2026

Situation:

Person A: 2 000 € net/month (CDI)
Person B: 1 800 € net/month (CDI)
Combined monthly income: 3 800 € net
Existing charges: consumer credit of 180 €/month (Person A)
Personal contribution: 40 000 €
Intended loan term: 25 years
Average market rate 2026: to be checked

Calculation:

Maximum debt capacity: 3 800 € × 35 % = 1 330 €
Less existing charges: 1 330 € − 180 € = 1 150 € available
With a rate of about 3,5 % over 25 years: 1 150 € × 215 ≈ 247 250 € borrowable
Total budget: 247 250 € + 40 000 € = ~287 250 € for their new-build project

This couple could consider new-build programmes between 280 000 and 300 000 €, depending on the precise market conditions.

Optimising your borrowing capacity

Before you meet your bank

Repay your consumer credit: every pound freed up increases your property borrowing capacity.
Build up a contribution: 20–30 % of the property's value is a realistic goal.
Stabilise your income: where possible, show a sound track record over 2–3 years.
Document your file: payslips, tax assessments, bank statements, proof of contribution.
Consult several banks: offers and conditions vary considerably.

Using the 2026 support schemes

If you are a first-time buyer, the PTZ (Interest-Free Loan) can increase your capacity by supplementing your financing at no cost. The ceilings and eligibility conditions of the PTZ depend on your geographical zone (zone A, A bis, B1, B2). To be checked according to your commune.

Other schemes such as Action Logement offer complementary loans or grants depending on your sector of activity.

Pitfalls to avoid

❌ Confusing borrowing capacity with the actual budget

Your borrowing capacity is the theoretical maximum. Your actual budget must also include:

Notary fees (2–3 % of the sale price for new builds)
Bank arrangement fees (generally 300–600 €)
Borrower insurance (included in the monthly payment, and not negligible)
Works or fittings after purchase

A property at 250 000 € will actually cost you 260 000–270 000 € in ancillary costs.

❌ Overestimating your loan term

Borrowing over 30 years eases the monthly payment, but the total interest becomes substantial. Prefer 20–25 years if your income allows.

❌ Ignoring borrower insurance

Compulsory insurance (death, disability) represents 0,3–0,6 % of the amount borrowed per year. It is never negligible.

❌ Accepting the first rate offered

Use your right to compare: banks must provide you with simulations. Compare at least three institutions.

When and how to have your borrowing capacity assessed?

✅ The right approach

Prepare your file before any property viewing (3–4 weeks).
Meet your usual bank or speak to a broker for a pre-approval simulation.
Get a borrowing capacity certificate so you can negotiate with the developer with confidence.
Once you have found your property, request a formal loan offer (legally valid for 45 days).
Finalise your file with your bank and your notary.

This sequence helps you avoid falling in love with a property you cannot finance, or missing an opportunity through lack of preparation.

JL HOME: your ally in mastering your borrowing capacity

At JL HOME, we understand that calculating your borrowing capacity is also about planning your property project with peace of mind. Our advisers help you to:

Realistically assess your budget based on your income and family situation.
Identify the support schemes suited to your profile (PTZ, Action Logement, etc.).
Access quality new-build programmes aligned with your capacity.
Maximise your purchasing power without taking unnecessary risks.

We work in partnership with leading banks to secure your financing and offer you a turnkey process.

To go further

Need to clarify your financial situation? Ready to explore new-build programmes?

👉 Simulate your borrowing capacity for free or book an appointment with a JL HOME adviser. We will guide you towards the best purchasing strategy for 2026 and beyond.

Frequently asked questions

What is the maximum debt-to-income ratio accepted by banks in 2026?

The standard benchmark is 35% of your monthly net income. Some banks accept 40–45% depending on your profile (substantial deposit, stable income, permanent employment contract (CDI)). Beyond that, it is rare and subject to less favourable conditions. To be confirmed with your bank.

How do I convert my available monthly repayment into a borrowable amount?

This is an amortisation calculation that depends on the interest rate and the term. As an approximation, with 3,5 % over 25 years, a monthly payment of 1 € equals 215 € borrowed. For precision, a simulator or a bank adviser remains essential.

What personal deposit should I aim for?

A deposit of 20–30% of the property's value is a solid target. It improves your bank terms (better rate, more favourable debt ratio). With PTZ, you can buy without a deposit, but it is more complex to structure.

Does the PTZ increase my borrowing capacity?

Yes. The PTZ is a supplementary source of financing (zero-interest) for first-time buyers, subject to conditions relating to zone and income. It increases your total funding envelope but does not change your bank debt ratio. Ceilings and conditions should be checked for your commune.

Should I choose a 20-year or a 25-year loan?

20 years = higher monthly repayment, but lower interest. 25 years = lower monthly repayment, higher interest. Choose according to your income and financial outlook. The majority of first-time buyers opt for 20–25 years in 2026.

Does my borrowing capacity change if I am single or in a couple?

Yes, entirely. As a couple, you combine your net incomes for the ratio calculation. This generally increases your capacity. However, both incomes must be documented, and a weaker profile may hinder access to credit.

What is the impact of borrower insurance on my monthly repayment?

Borrower insurance (death, disability) typically represents 0,3–0,6 % of the amount borrowed per year. It increases the monthly payment but remains mandatory. It is a cost to include in your real budget from the outset.

Should I have my borrowing capacity validated before viewing new-build homes?

Strongly recommended. A pre-approval certificate from your bank allows you to negotiate with confidence and avoid losing a property through lack of financial preparation. Allow 3–4 weeks to put the file together.

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