Home loan insurance represents on average 10 to 20% of the total cost of your financial envelope. Changing borrower insurance can save you several thousand dollars in the long run.
And it is possible to change it at any time or almost. Here is the procedure to take advantage of new mortgage loan insurance at a competitive price!
Changing mortgage insurance: what are the required conditions?
A mortgage insurance, or borrower insurance, is always backed by one or more mortgage loans to guarantee the same property (house, apartment, construction, etc.).
As a result, your banking institution offers you a group insurance proposal, that is to say insurance that is the same for all borrowers, and the price of which varies according to the amount of the loan granted and not according to the of your personal situation.
The risk is thus mutualized between the borrowers, but mortgage insurance is not beneficial for all. Indeed, the youngest will often have an interest in finding another insurance, as well as people who have an aggravated health risk or a job a risk for example, because of a high premium.
You should know that borrower insurance is a fairly profitable product for the bank, in the sense that the risk profit margin is often comfortable. Thus, the prices can vary from single to double for two identical profiles.
Whatever your situation, it is therefore relevant to compare between the insurance offered by your bank and the external insurers who offer individual contracts. For this, you will need the documents issued by the lending institution, and in particular the FSI (Standardized Information Sheet).
This sheet summarizes the guarantees offered and specifies the minimum quotas to be respected, whether in disability or incapacity. From there, you can freely choose your insurer while respecting the guarantee equivalence: this is called insurance delegation.
Change mortgage insurance: when?
It can be useful and financially interesting to change mortgage insurance at different periods, either because you are at the start of a loan, or because your personal situation has changed, reducing the risk, or because you are taking a loan. repurchase of credit. Or, quite simply, because it is cheaper elsewhere for the same guarantees!
To make a change once the bank’s insurance has been taken out, you will be obliged to terminate the old contract in order to set up a new one. The procedures differ depending on the time chosen, explanations …
Before taking out your mortgage thanks to the Lagarde law
With the Lagarde law, which entered into force in 2010, the insurance delegation allows the borrower to choose his mortgage insurance wherever he sees fit. The bank cannot oppose its refusal, unless the guarantee equivalence is not respected.
This way, external insurance is easy to set up from the start of the loan. But for that, it is not only necessary to be informed of this possibility and to have the time to look for a contract competition, but also not to yield to the pressure of the banker who will do everything to persuade you to subscribe with him.
Do not panic however, if you do it late, once the mortgage offer has been signed and the borrower insurance has been put in place, you will be able to change thanks to the Hamon law …
12 months after acceptance of the loan offer thanks to the Hamon law
With the Hamon law, you can change your borrower insurance contract at any time during the first year. This makes it possible to quickly set up the new guarantee, even if one has made a commitment to the bank to take the proposed contract.
To terminate, it is always compulsory to respect the equivalence of guarantees, and the procedures are simplified. Only a period of notice to the bank of 15 days is necessary, and the latter has a maximum of 10 days to notify its acceptance.
In the event of refusal, it must be explicitly motivated and can only relate to an equivalence of guarantees not respected. All other grounds are void and illegal. Finally, if you missed the first year, rest assured, it is always possible to change …
On the anniversary date of the contract thanks to the Bourquin amendment
With the Bourquin amendment, it is possible to change borrower insurance almost as easily as car insurance or health insurance. Indeed, you can terminate to set up a more favorable contract on each expiry date of your contract. The mortgage loan insurance expiry date corresponds to the anniversary date, i.e. the establishment of the mortgage loan.
You must then respect a notice of 2 months in addition to the equivalence of guarantees. The new borrower insurance contract will be put in place on the anniversary date, so that there is no interruption of guarantees.
This can be advantageous in several cases. In addition to an attractive offer made by a competing insurer, other life events should lead you to compare: stopping smoking, ending a long illness, change of profession, etc.
When buying a mortgage
Your mortgage dates back several years, and the interest rates on your loan were probably higher than they are now. In many cases, if you want to keep the property, it is worth making a loan buyback to save money.
Who says repurchase of credit, says old mortgage settled in favor of a new one, and ditto for borrower insurance. The new insurance will therefore be taken out according to the outstanding capital and your current situation (age, profession, state of health, etc.).
Note that it is also possible to revise the rate of your borrower insurance downwards with your bank, as part of a mortgage renegotiation.
Find the most interesting borrower insurance to change!
Now that you know all of the termination cases available to you, it’s time to start looking for your new home loan insurance. The key to this change: savings of hundreds, even thousands of euros. Suffice to say that this gain will be appreciated for little extras or a remunerative investment.
Before signing up with a new insurer, you must check the guarantees offered and be particularly attentive with regard to waiting periods, age limits, exclusions of guarantees and possible tariff revision and termination clauses.
In order to find the most interesting borrower insurance for your mortgage, two solutions are available to you. The first is to hire an insurance broker, who knows the market according to your specific needs and can guide you quickly. The second is to use the magic of the Internet by using an online simulator, which puts many insurers in competition with no cost and no obligation.
Thanks to the online comparator, you can quickly see the borrower guarantees offered by each insurer, their cost and overall rates, as well as their level of coverage and any exclusions.