Thanks to the insurance delegation, it is possible to take out mortgage loan insurance other than that offered by the lending bank. Thus, whether it is before the implementation of the contract or after, changing borrower insurance becomes accessible to all.
While certain conditions are essential to make this change, it is also essential to do it in time. So what are the dates to change mortgage insurance? We review all the scenarios …
Reminder: the conditions for terminating borrower insurance linked to guarantees
Before even thinking about changing insurance for your borrower guarantee, you should know that it is not cancellable strictly speaking, but just “interchangeable”. Indeed, it is important for the buyer of the property as for the banking establishment. Backed by the mortgage, mortgage insurance must cover the risks of default on payment of due dates without a period of interruption.
The delegation of insurance requires compliance with an essential condition: the equivalence of guarantees. Thus, when your credit organization makes you an insurance proposal, it must issue you a standardized information sheet in which the minimum guarantees of borrower insurance appear. To take out a contract with the competition, it is necessary to be vigilant with the equivalence of guarantee.
This is indeed, all grounds for termination or change combined, the only criterion that the bank can use to refuse you. If the guarantee equivalence is respected, the change of insurance is automatically accepted, on the sole condition of respecting the dates.
Cancellation or change of insurance on the correct dates
Several possibilities exist for changing home loan insurance. It is important to know which ones you can use so that the termination is accepted and the new guarantees take over …
Before setting up the insurance offered by the bank: Lagarde law
The Lagarde law has entered into force since 2010 and allows the borrower to freely choose the insurer for mortgage insurance. Here, there is no formal date to respect, except the only implementation of delegation of insurance before the final signing of the mortgage, and the release of funds.
You must therefore study this possibility beforehand and see if it is advantageous for you. To compare competing offers, just look at the TAEA (Annual Effective Insurance Rate) and the overall cost of borrower insurance.
During the first year following the establishment of the mortgage: Hamon law
The Hamon law has come to reduce the pressure of the banks on the borrowers, by allowing them to change insurance very simply as soon as the mortgage is put in place. It is thus possible to terminate the borrower insurance during the first twelve months with light formalities.
For this, the only condition to be respected in terms of dates is minimum notice period of 15 days. In other words, for mortgage insurance starting on 1er January 2021, you have until December 16 of the same year to set up another contract.
The bank then has a maximum acceptance period of 10 days, at the end of which it notifies you of the implementation of the new guarantees. In the event of a refusal, this must be clearly motivated and cannot relate to anything other than the equivalent guarantee.
On each contract expiry date: the Bourquin amendment
Some borrowers do not think of playing the competition right away, either because of ignorance of their rights, or because of a lack of time, or because their personal situation made it more difficult to take out mortgage insurance.
But thanks to the Bourquin amendment, it is possible to terminate your borrower insurance in favor of a new contract on each anniversary date. For this, it is necessary to respect a notice of 2 months before the due date of your contract.
Thus, a contract with an anniversary date of May 15 may be terminated at the latest by registered letter with acknowledgment of receipt sent before March 15 of each year. Subject to the guarantee equivalence, the new contract will take over on the anniversary date of the old one.
When renegotiating or redeeming a mortgage
The last case explaining a change of insurer does not require respecting certain specific dates. Indeed, if you make a repurchase of credit, your old borrower insurance is automatically terminated at the same time as the mortgage.
In the event of renegotiation with your own bank, it is possible to lower the mortgage insurance rate, in particular because the outstanding capital has decreased following payments of several installments.
Free to change mortgage insurance
Regardless of when you want to change borrower insurance, know that the process is free. Your banking establishment cannot in any case charge you for the establishment of another insurance.
If the guarantee equivalence and the termination dates are respected, the bank is required to accept the competing insurance offer and must for this purpose publish a new amortization table taking into account the new borrower insurance, free of charge. .
Want to save several tens of euros each month? Take advantage of our online simulator to pay your mortgage insurance cheaper. It’s fast, free and without obligation!