Understanding French Mortgages: Income and Outgoings Requirements

French non-resident mortgages are one of the most structured and conservative parts of the international property finance market. French lenders apply a well-defined set of affordability rules that differ meaningfully from the UK and US mortgage frameworks most international buyers are accustomed to, and understanding these rules before the application is the single biggest thing a prospective buyer can do to ensure a smooth financing process. The French framework is rigorous but fair, and buyers who understand it can position their applications to maximise the approval probability and secure the best available terms.

The central rule is the 33% affordability test — total monthly debt service (mortgage payments, other loan obligations, alimony, existing property-related obligations) cannot exceed 33% of the borrower's monthly gross income. This test is applied at the point of application using documented and verifiable income and outgoings, and it is a hard constraint rather than a soft indicator. Applications that fail the 33% test are declined, with no meaningful flexibility available through the appeal process. This is more conservative than most UK lenders and significantly more conservative than US and Swiss lenders, and it can be a binding constraint even for borrowers who assume they have plenty of headroom.

This guide explains how French lenders actually calculate income and outgoings for non-resident mortgage applications, which income categories qualify and which do not, which outgoings are counted against the 33% test, the documentation buyers need to provide, and the practical steps borrowers can take to strengthen their applications. Our aim is to move from the general guidance that most introductory articles provide into the specific detail that affects real application outcomes, so that buyers can approach the French mortgage process with realistic expectations and a clear sense of their affordability envelope.

The 33% rule is a regulatory ceiling that applies to all French mortgage lending, introduced in its current strict form by the French financial supervisor (Haut Conseil de Stabilité Financière) in 2022 as part of a broader effort to contain household debt accumulation. Prior to 2022, French lenders had some flexibility to exceed the 33% ratio for specific customer profiles, but the 2022 reforms removed most of this flexibility. The current rule allows banks to exceed 35% on only a small proportion of their mortgage book (up to 20%), and in practice banks enforce the 33% limit strictly on non-resident applications because the limited flexibility is typically reserved for domestic customers.

The calculation is straightforward but precise. Monthly gross income is calculated from documented sources (salary, self-employment income, rental income, dividend income) over a 12-24 month look-back period, typically using tax returns as the primary evidence. Monthly debt service includes the new mortgage payment on the French property (capital, interest and mandatory life insurance), any existing mortgage payments on other properties, any personal loan or car loan payments, any child support or alimony obligations, and any guaranteed debt service on business loans. The ratio is calculated as (debt service / gross income), and the result must be 33% or lower.

Rental income from the property being purchased is generally excluded from the gross income calculation for the 33% test. This is an important point that many first-time applicants miss: the French framework does not allow the applicant to argue that the rental income from the property will cover the mortgage payments and therefore the affordability test should be relaxed. The test is applied as if the property were non-income-generating, which means the borrower's underlying income must support the mortgage independently of any expected rental income. Some lenders apply limited relief for documented rental income from other properties (typically 70% of the gross rental income is allowed), but the property being purchased is excluded.

Worked example: a couple with combined gross monthly income of €12,000 (approximately €144,000 per year) has an affordability ceiling of €3,960 per month in total debt service. If they have no existing debt, the full €3,960 is available for the new French mortgage. On a 20-year fixed-rate mortgage at 4.1%, this supports a loan amount of approximately €650,000. If the same couple has an existing UK mortgage requiring €1,800 per month, the available headroom drops to €2,160 per month, supporting a loan amount of approximately €355,000 on the same terms. The differential is material and catches many applicants by surprise.

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Employment salary is the most straightforward qualifying income category. French lenders accept employment income from international employers subject to documentation (payslips covering the last 3-6 months, employer confirmation letter, 2-3 years of tax returns showing income history). Bonus income is typically accepted but discounted — most lenders include only 50-80% of documented bonus income in the calculation, on the basis that bonuses are less certain than base salary. Commission income is treated similarly, with stricter discounting for volatile commission histories.

Self-employment and business owner income is accepted but with meaningfully more documentation requirements. Lenders typically require 3 years of business tax returns, business accounts prepared by a qualified accountant, and evidence of the applicant's ownership and remuneration from the business. Distributions from closely-held businesses are included in income calculations, but with discounting where the business appears volatile or where the applicant's remuneration has varied significantly year-over-year. Buyers with complex business income should engage a specialised mortgage broker early to structure the application effectively.

Rental income from properties other than the one being purchased is accepted, typically at 70-80% of documented gross rental. The discounting reflects the reality that rental income fluctuates with occupancy and market conditions. Evidence required includes tenancy agreements, recent bank statements showing rental receipts, and tax returns showing declared rental income. Short-term rental income (AirBnB-style) is treated more conservatively than long-term rental income because of the higher variability, typically with 50-70% recognition.

Dividend and investment income is accepted subject to documentation of at least 3 years of history. One-off distributions, irregular investment income, and highly volatile portfolio returns are typically excluded or heavily discounted. Lenders look for sustained, documented income streams that can reasonably be expected to continue, rather than windfall events that happen to fall within the look-back period. Pension income (state pension, private pension annuities, defined benefit pension payments) is generally accepted in full, subject to age-related adjustments for some lenders.

Categories that typically do not qualify include informal cash income without tax return support, one-off bonuses outside the normal compensation framework, expected future income (for example, an expected inheritance or anticipated bonus), and rental income from the property being purchased. Some lenders also exclude or heavily discount crypto-asset returns, stock option exercises, and income from jurisdictions with which France has no tax information exchange agreement. Buyers with meaningful income in these categories should expect the French affordability test to be more constraining than their own internal view of their wealth.

Existing mortgage obligations on other properties are counted in full toward the 33% test, regardless of the jurisdiction of the existing mortgage. This includes UK mortgages, US mortgages, Swiss mortgages, and any other formal home loan. The mortgage payment is calculated as the full monthly capital and interest payment (not just interest), and is included on a consistent basis with the new French mortgage. For borrowers with large existing mortgages, this is often the single biggest constraint on French affordability and can rule out purchases that appear affordable on a simpler income-only analysis.

Personal loans and auto loans are counted on the same basis. Credit card balances that carry ongoing monthly repayments are counted at the required minimum payment level, though lenders will also consider the total outstanding balance in the qualitative affordability assessment. Buy-now-pay-later arrangements and similar modern consumer credit products are increasingly included as lenders have developed processes to identify them through bank statement analysis. Borrowers should expect all formal and informal debt obligations to be visible to French lenders through the standard documentation review.

Alimony and child support obligations, whether arising from a court order or a formal separation agreement, are counted in full as ongoing monthly obligations. This includes both ongoing maintenance payments and any scheduled lump-sum commitments. Tax obligations (regular income tax and social security payments, property tax, wealth tax) are generally not counted as debt service for the 33% test, but large or recurring tax arrears would be treated as a negative factor in the qualitative credit assessment and could affect approval independently of the numeric ratio test.

Co-ownership charges and ongoing property costs on existing properties are not generally counted against the 33% test because they are operational rather than debt service. However, lenders look at the overall picture of the borrower's existing property portfolio and will factor in unsustainable operating costs during the qualitative assessment. Borrowers with multiple properties in their existing portfolio should expect French lenders to look carefully at whether those properties are generating net income or net losses, because a heavily loss-making existing portfolio raises concerns about the borrower's ability to sustain another property purchase.

Life insurance premiums associated with the new French mortgage are counted in the mortgage payment calculation, which has a meaningful effect on the affordability ratio. French lenders require all borrowers to hold life insurance covering the outstanding loan balance, with the lender as beneficiary. Premiums depend on the borrower's age, health, smoker status and cover level. For a healthy 40-year-old borrowing €400,000 over 20 years, typical annual premiums are €800-1,600, adding €65-135 per month to the effective mortgage payment. Older borrowers face significantly higher premiums that can push the affordability ratio over the limit even when the underlying rate is acceptable.

The standard documentation package for a French non-resident mortgage application includes 2-3 years of personal tax returns (or equivalent evidence in jurisdictions that do not use tax returns), 3-6 months of personal bank statements showing salary and outgoing patterns, 3 months of credit card statements, a current employer confirmation letter stating employment status and salary (or equivalent self-employment documentation), proof of identity (passport), proof of residence (utility bill or equivalent), and a detailed statement of existing assets and liabilities. The total package is typically 150-300 pages for a straightforward application.

For self-employed and business owner applicants, additional documentation includes the last 3 years of business accounts prepared by a qualified accountant, 3 years of business tax returns, evidence of the applicant's ownership structure in the business, and current-year management accounts showing income performance through the application date. Lenders conduct independent verification of business registration and standing where possible. The documentation requirement for complex self-employment cases can reach 500 pages, and the preparation time alone can be 4-8 weeks before the application is ready to submit.

For applicants with rental income from other properties, documentation includes the relevant tenancy agreements, 12 months of bank statements showing rental receipts, tax returns showing declared rental income, and property-level operating statements showing net rental income after costs. This is particularly important for applicants whose overall income picture depends meaningfully on rental income from existing portfolios, and incomplete or inconsistent documentation here is a common cause of application delays.

For applicants with complex income structures involving trusts, partnerships, stock options, or unusual compensation arrangements, lenders typically require detailed legal and tax advisor letters explaining the structure and confirming the income flow. These applications take longer to assess and often go through multiple rounds of credit committee review before approval. Buyers with complex income structures should engage a specialised French non-resident mortgage broker at the earliest possible stage to plan the application approach and avoid surprises.

The single most effective step is to reduce existing debt service before applying. Every €500 per month of eliminated existing debt service translates into approximately €80,000-90,000 of additional French mortgage borrowing capacity on a 20-year fixed-rate loan. For borrowers with existing debt, paying down car loans, consumer credit or reducing existing mortgage balances can meaningfully improve the French application outcome. The timing matters — lenders look at the current position as documented by the most recent bank statements, so debt reduction needs to be completed at least 3 months before application to show in the documentation window.

Second, ensuring that documented income is presented on a clean and consistent basis is important. Self-employed applicants should ensure that business accounts clearly show the applicant's remuneration and that the 3-year trend is stable or improving. Employed applicants should ensure that salary payments flow through a single traceable bank account rather than being split across multiple banks. Applicants with bonus income should time the application to include a strong bonus year rather than a weak one within the look-back window, where this is feasible.

Third, joint applications are often stronger than individual applications because the combined income supports a larger mortgage. French lenders routinely accept joint applications from spouses, civil partners and cohabitants, and occasionally from other family combinations (parent-child, siblings). The combined income test is applied on a consolidated basis, which can allow applications to succeed where individual applications would fail. Joint applicants should both be willing to be named on the mortgage and accept joint liability for the debt service.

Fourth, the choice of lender matters. Different French lenders have different appetites for non-resident applications, different strengths in specific jurisdictions, and different interpretations of the 33% rule's edge cases. A specialised French non-resident mortgage broker can match applicants to the lender most likely to approve their specific profile. The brokers typically maintain relationships with 6-10 lenders and have real-time knowledge of which are actively lending to which applicant profiles. The broker fee (typically 0.5-1% of the loan amount) is usually well justified by the improved approval probability and sometimes better terms.

Fifth, lowering the loan-to-value ratio by increasing the deposit can help in borderline cases. French lenders prefer applications at 70-75% LTV over applications at 80% LTV, and will sometimes accept an 80% application from a strong borrower while rejecting a borderline 80% application. For applicants with flexibility on deposit, increasing the down payment from 20% to 25% or 30% can be the difference between approval and rejection even where the absolute affordability numbers look broadly similar.

Interest rates in early 2026 for French non-resident fixed-rate mortgages are running at approximately 3.8-4.4% for 20-year terms, with some variation by lender, borrower profile and specific product. The rate environment has softened since the 2023 peak around 4.8% as the ECB has eased monetary policy, but rates remain meaningfully higher than the ultra-low environment of 2019-2021. Variable-rate products are available at slightly lower headline rates, typically 3.3-3.9%, but carry interest-rate risk that most international buyers prefer to avoid.

Typical loan terms for non-resident mortgages are 15, 20 or 25 years, with 20 years being the most common choice for balancing monthly payment and total interest cost. Some lenders will extend to 25 years for younger borrowers (typically under 55 at application) where the total loan term plus current age stays below 80. Shorter terms (10 or 15 years) are available and can produce better rates but require meaningfully higher monthly payments that can push the 33% affordability test.

Loan-to-value ratios vary by borrower profile. EU and Swiss residents typically qualify for up to 80% LTV, UK residents for up to 75-80% LTV, US residents for up to 70-75% LTV, and applicants from further jurisdictions for 60-70% LTV. These are indicative maxima and individual cases vary. Loans below 50% LTV sometimes qualify for better rates because the collateral protection is stronger. Loans above 80% LTV are rare in the non-resident market and typically require specific lender arrangements that few brokers can access.

Fees and ancillary costs include the lender's arrangement fee (typically 1% of the loan amount), the mortgage broker's fee (0.5-1% of the loan amount), the notaire's mortgage-specific fees (approximately €1,500-3,000 for mortgage registration and associated legal steps), the life insurance arrangement (typically €200-500 in one-off fees plus ongoing premiums), and the property valuation fee (€300-800 depending on the lender's chosen valuer). Total one-off fees for a €400,000 mortgage typically run at €7,000-12,000 on top of the mortgage principal itself.

The French mortgage application timeline from initial enquiry to final offer is typically 8-12 weeks for straightforward applications, extending to 16-20 weeks for complex cases. This is significantly longer than UK or US mortgage timelines and is one of the structural constraints that buyers need to plan for. The standard French property purchase timeline assumes the buyer has a mortgage contingency in the preliminary contract that allows 45-60 days for the mortgage to be arranged. For borderline cases, this can be extended by negotiation but should not be taken for granted.

The application sequence typically begins with an initial conversation with a specialised non-resident broker, who will review the applicant's documents, confirm an indicative borrowing capacity, and recommend one or two lenders for the formal application. The broker handles the document preparation, submission to the lender, and ongoing liaison through the approval process. Buyers should use the indicative borrowing capacity to calibrate their property search, rather than waiting for formal approval before beginning viewings.

Once the buyer has accepted a specific property and signed the preliminary contract, the formal mortgage application moves into the verification and credit committee stages. The lender will typically commission a property valuation, conduct final income and outgoings verification, and submit the file to their internal credit committee for approval decision. Most standard applications are approved at first presentation; cases that require additional documentation or committee discussion typically receive a decision within 4-6 weeks of submission.

The mortgage offer document (offre de prêt) is legally required to be held by the buyer for a minimum of 10 days before signing, as a statutory reflection period. This is a buyer protection mechanism that allows final reconsideration before the binding legal commitment. Once the 10-day period has elapsed and the buyer has signed the acceptance, the mortgage becomes legally binding and the funds are scheduled for release to the notaire at the completion date. Any meaningful change to the application (change of lender, change of loan amount, change of property) after the offer is received requires the full process to restart.