Do you have a mortgage? You are probably covered by a borrower insurance that guarantees the repayment of the sums lent in case of default on your part. This insurance is expensive, especially if taken out with the lending bank. It is not a coincidence! Thanks to the Lemoine law you can withdraw from the current contract at any time and opt for a much more competitive formula.
Very expensive mortgage insurance
L’home mortgage insurance it is not mandatory from a legal point of view, but obliged by the bank a secure your loan. This insurance is therefore a mandatory product to obtain bank financing for any real estate project.
The insurance intervenes in the event ofwhims of life which would deprive you of resources to honor your debt (death, disability and interruption of work). The law allows you to freely choose the loan insurance contract, giving you the opportunity to be covered at the right price.
But too often, taken by the time to finalize their loan application, borrowers subscribe to theinsurance offered by the bank. When the latter does not put pressure, making the granting of the loan conditional on the signing of its internal contract. This practice is forbidden, but the weight and natural authority of the professional on a terrain that he perfectly masters, unlike his client, prevails over the right to free choice of the mortgage loan insurance contract.
The home mortgage insurance cost to that of interest on loans and other incompressible expenses (registration fees, mortgage or deposit fees, etc.). On average, insurance weighs between 30% and 40% of the total cost of a mortgageexpressed by APR (Annual percentage rate of charge). This indicator is necessarily under the wear rate applicable in the reference period.
If you signed up collective insurance contract of the bank, you are not a prisoner! You have the right to do so cancel at any time and free of charge thanks to the Lemoine lawthe latest regulation that strengthens the rights of borrowers.
Change the borrower’s insurance with the Lemoine law
Adopted in February 2022 and entered into force on 1 June, the Law of lemon operates a real revolution in home loan insurance. Unlike the Hamon law and the Bourquin Law Borrower Insurancethe exchange home mortgage insurance it is no longer subject to any expiration date: you have the possibility terminate the current contract whenever you wish, and this, the day following the signing of the loan offer. L’mortgage insurance It is the only insurance that can be canceled at any time, without the obligation of a minimum commitment as required by law Home insuranceauto insurance e mutual health.
The insurance replacement remains subject toequivalence of the level of guarantees : the new contract must offer protection at least equivalent to that of the bank contract.
The goal of the Lemoine law is to further open up to market 87% owned by bank insurers, that have recently been replaced by the European regulator. Their dominant position on this product is contrary to any logic of healthy and fair competitionand deprives borrowers of an opportunity to lower the cost of your mortgage. Banks are raking in up to 70% insurance margins on loansagainst an average of 20% to 30% for alternative insurers.
The Lemoine law obliges banks to comply with various obligations:
- the borrower must be informed every yearon any durable medium, your right to change insurance at any time;
- the bank’s response must be made within a 10 working days as part of an application for a change in mortgage insurance;
- any refusal must be fully justified in writing and on a single document.
Savings and better coverage with the Lemoine law
The delegated contracts are between two and four times less compared to bank offers. This argument alone justifies a substitution approach. External insurance also allows you to be cutlery made to measure, to meet their real needs. Group contracts are sharedbecause they have to cover a community of borrowers, unlike competing formulas whose guarantees fit the profile of each one.
You have the opportunity to do it lower the cost of home loan insurance in 2022, and by capillarity that of your credit. The savings amount to hundreds or even thousands of euros on the residual duration of the loant. As part of a loan of € 250,000 over 25 years, the change in insurance within three years of signing the loan offer can generate earnings of up to € 15,000.
Don’t wait to save on your home loan insurance! At a time when household purchasing power is being dragged down by inflation and soaring energy costs, the Law of lemon allows any borrower to do so reduce the weight of your insurance of a few tens of euros per month, which together represent a considerable gain in the long term. The sooner you change, the greater the savings.
Use a home mortgage insurance comparator, a simple, free and fast tool that gives you access to the best offers on the market. Select the contract adapted to your needs and do not hesitate to seek the services of a home mortgage insurance broker to help you choose the more competitive formulain compliance with the equivalence of guarantees.
