The repayment of a mortgage is based on a mathematical formula that combines three variables: the borrowed capital, the interest rate, and the loan duration. Each monthly payment made to the bank covers a portion of interest and a portion of amortized capital, with the distribution changing month by month. Understanding this mechanism allows for comparing banking offers on a concrete basis, not just on an impression.
Usury rate and HCSF rules: the limits that frame your monthly payment
Even before establishing a calculation formula, two regulatory safeguards limit the monthly payment that the bank can grant you. Ignoring them amounts to simulating a theoretical loan that will be refused in practice.
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Since January 1, 2022, the recommendations of the High Council for Financial Stability (HCSF) have become binding. They impose a maximum effort rate of 35% of the borrower’s net income, including insurance, and a repayment duration capped at 25 years. The flexibility margin that banks have to deviate from these thresholds remains very limited.
The usury rate sets another limit. It corresponds to the maximum APR that an institution can apply. In the third quarter of 2026, this ceiling reaches, for example, 5.29% for loans of 20 years or more. If the sum of the nominal rate, borrower insurance, and processing fees exceeds this threshold, the bank cannot grant you the loan, even if your effort rate remains below 35%.
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Knowing how to calculate the repayment of a mortgage therefore requires checking beforehand that the proposed monthly payment complies with these two constraints simultaneously.
Formula for calculating the monthly payments of an amortizable loan
The vast majority of mortgages in France follow the model of a fixed-rate amortizable loan. The amount paid each month does not change, but its internal composition changes over time: the portion of interest decreases while the portion of capital repaid increases.
The formula used by banks is written as follows: monthly payment = (capital x monthly rate) / (1 – (1 + monthly rate) raised to the power of minus n), where n represents the total number of monthly payments and the monthly rate corresponds to the annual rate divided by 12. This method, known as proportional, is the standard in France for calculating mortgages.
Applying the formula to a concrete case
Let’s take a loan over 20 years (i.e., 240 monthly payments). The monthly rate is obtained by dividing the annual rate by 12. This monthly rate is then used in the formula to obtain the fixed amount of each payment. The difficulty lies less in the calculation itself than in choosing the correct rate to inject: the nominal rate alone does not reflect the actual cost of the loan.
Borrower insurance, guarantee fees, and processing fees are added to the nominal rate to form the APR (annual percentage rate). It is this APR that must remain below the usury rate and reflects the total cost of the loan.
Amortization table: reading the capital and interest distribution
The amortization table details, month by month, the breakdown of each monthly payment between repaid capital, paid interest, and remaining capital owed. This document, which the bank must provide with the loan offer, allows you to visualize a fact often underestimated: in the first years, you mainly repay interest.
On a long loan (20 or 25 years), it often takes until halfway through the term for the portion of capital repaid to exceed that of interest in each payment. This mechanism has a direct consequence on early repayment.
Early repayment and saved interest
Repaying early at the beginning of the loan generates a much more significant interest saving than at the end of the loan, precisely because the remaining capital owed is higher. The amortization table allows you to calculate exactly the interest you avoid paying by injecting a sum at a given payment.
Most loan contracts provide for early repayment penalties (IRA), usually capped by law. Checking this amount in your loan offer before any simulation is necessary to obtain a realistic calculation of the net savings.
Online simulators and spreadsheets: choosing the right calculation tool
The mortgage simulators available on bank or broker websites apply the formula described above, but their results vary depending on the parameters they include. Some do not include borrower insurance in the calculation of the monthly payment, which skews the comparison.
To obtain a reliable result, check that the tool allows you to enter:
- The amount of borrowed capital and the desired duration, to establish the basis for the calculation
- The nominal rate proposed by the bank, distinct from the advertised rate displayed in the window
- The cost of borrower insurance (as a percentage of the initial capital or remaining capital owed, depending on the contract)
- The guarantee fees (mortgage, surety) and processing fees, to obtain a complete APR
A spreadsheet (Excel, Google Sheets) remains a useful complementary tool. By reproducing the monthly payment formula in a cell and building an amortization table line by line, you can simulate scenarios that online calculators do not always offer: payment modulation, partial early repayment on a specific date, or comparison between two loan durations.
Interest rate context in 2026: why recalculating regularly
The average mortgage rates are around 3.1 to 3.3% in 2026, according to the barometers of several brokers (CAFPI, Empruntis, MoneyVox) and data from the Bank of France. This moderate but continuous rise since early 2026 significantly alters the results of simulations compared to the levels observed during the stabilization period of 2025.
Recalculating your monthly payment with up-to-date rates, rather than relying on a simulation from a few months ago, avoids unpleasant surprises when assembling the file.
The calculation of mortgage repayment is not limited to a mathematical formula. The actual monthly payment depends on the APR, the usury rate, and the HCSF debt ceiling, three parameters that most basic simulators do not display together. Cross-referencing the result of a calculator with the reading of the amortization table provided by the bank remains the most reliable method to validate the feasibility of a project.