The 35% debt ratio explained simply: what you need to know for your new-build home project in 2026
Published on July 20, 2026 · Financing
Are you preparing to buy your main residence or a rental investment in new-build property? One figure invariably comes up in discussions with banks: the well-known debt-to-income ratio of 35 %. Often cited, rarely clearly explained, it nonetheless determines whether your mortgage is approved. In 2026, understanding this threshold and knowing how to calculate it allows you to approach your project with confidence and maximise your chances of securing financing.
At JL HOME, we every day support first-time buyers and investors in structuring their budgets. Here, without jargon, is everything you need to know.
What is the debt-to-income ratio?
The debt-to-income ratio measures the share of your income devoted to repaying your loans. It answers a simple question: how much money goes towards your debts each month, compared with what you earn?
Following the recommendations of the French High Council for Financial Stability (HCSF), banks apply a reference ceiling of 35 % of income (borrower insurance included). In practical terms, if your loan charges exceed 35 % of your income, the bank considers your budget too stretched and may decline the application.
Please note: this threshold is a framework set by regulation. The precise terms and any flexibility left to banks should be checked with an adviser, as they change over time.
How is the debt-to-income ratio calculated?
The calculation is based on a straightforward formula:
Debt-to-income ratio = (monthly loan charges ÷ monthly net income) × 100
What the bank counts as charges
- The future monthly property loan repayment (insurance included)
- Existing loans: car loan, personal loan, revolving credit
- Maintenance payments made
What the bank counts as income
- Net salaries (often the average of recent months)
- Rental income (generally weighted, as it is not guaranteed at 100 %)
- Certain bonuses and regular income
A practical example
Take a couple with 4 000 € of monthly net income. The 35 % threshold allows a maximum loan charge of:
4 000 € × 35 % = 1 400 € per month.
If this couple has no existing loans, they could therefore consider a monthly repayment (insurance included) of up to 1 400 €. However, if they already repay 300 € on a car loan, the remaining capacity for a property loan falls to 1 100 €.
This example illustrates a key principle: each existing loan directly reduces your borrowing capacity for a property. Settling a small loan before submitting your application can therefore make a real difference.
Why does the 35 % threshold exist?
The ceiling protects the borrower first. By limiting the share of income dedicated to credit, it ensures you have enough left to live on: what is known as residual income. It also protects banks and the stability of the financial system by preventing over-indebtedness.
A household with high income will have a comfortable residual income even close to 35 %, whereas a more modest household will be assessed with greater caution, even below the threshold.
First-time buyers: optimising your capacity
If you are buying your main residence in new-build property, several levers can improve your profile with regard to the debt-to-income ratio.
The zero-interest loan (PTZ)
The PTZ is an interest-free loan aimed at first-time buyers, whose conditions depend on your geographical zone and your income. By complementing your financing, it can reduce the amount to borrow on the main loan, and therefore lighten the overall monthly repayment. The ceilings and proportions of the PTZ vary by zone and should be checked with an adviser.
The reduced fees of new-build property
Buying new-build property offers an often underestimated advantage: reduced notary fees compared with older property. These lower fees reduce the deposit required and leave more room in the overall budget.
Extending the loan term
A longer term lowers the monthly repayment, and therefore the debt-to-income ratio, while increasing the total cost of credit. This is a trade-off to discuss according to your situation.
Buy-to-let investors
For a buy-to-let investment, banks generally include part of the future rents in the income calculation. This weighting reduces the impact of the new repayment on your debt-to-income ratio, without fully neutralising it.
Caution: no rent is guaranteed and no return is assured. The bank applies a discount precisely because rental income carries an element of uncertainty (vacancy, non-payment). Investing in new-build property, whatever the tax regime considered, should rest on a prudent budget and personalised support.
Common mistakes to avoid
- Forgetting borrower insurance: it is included in the calculation and can weigh heavily.
- Neglecting small loans: a modest revolving credit facility reduces your capacity.
- Confusing gross and net income: banks reason on a net basis.
- Overestimating rental income: it is weighted, not counted at 100 %.
How do you know where you stand?
The best way to see clearly is to simulate your situation before committing. A quick calculation gives you an initial estimate, but every application is unique: nature of income, existing loans, deposit, purchase zone.
Want to know your actual borrowing capacity for a new-build home in 2026? Book an appointment with a JL HOME adviser or start your personalised simulation: we structure your budget and identify the levers suited to your project.
In summary
A debt-to-income ratio of 35 % is not an obstacle, but a benchmark. Properly understood, it becomes a tool for steering your property project. By optimising your existing loans, using the right schemes and seeking support, you give yourself every chance of completing your new-build purchase.
Context 2026. The thresholds, rates and schemes mentioned may change: always check the conditions in force with a professional.
