Real estate credit: the reflex to save thousands of euros

It is an essential condition to hope to obtain a mortgage: take out insurance. In the event of the death of one of the borrowers or in the event of a major health concern preventing him from working, it is she who will repay the remaining monthly payments, at least in part. This protection is very expensive and can even exceed the amount of interest on the credit repaid. However, too often borrowers focus on the credit rate offered by their bank, without giving too much importance to borrower insurance.

However, there is in theory a relatively simple way to reduce the bill: change insurance. Indeed, since 2010, legislation has been gradually amended to make the market more competitive and allow households to save money on insurance. It is possible to change it during the first year, then on each anniversary of the contract on condition that the credit institution presents a borrower insurance contract with an equivalent level of guarantee, and this two months before the expiry of the on-going contract.

Bad bank practices denounced

However, few borrowers leave the bank that provided them with the insurance at the same time as the mortgage. Banking establishments capture 87.5% of the market, which represents a jackpot valued at more than 6.5 billion euros per year.

If individuals benefit little from the legislation at their disposal, it is mainly because some banks don’t play the game. According to a recent study by Securimut, specializing in bank insurance substitution, half of the establishments do not comply with the legal deadlines of 10 working days from receipt of the request to say whether or not they accept the delegation. Some never even respond. The delaying measures implemented by banks to discourage requests are both the most unfair and the most dissuasive procedures for borrowers, S’indigne Securimut.

An observation shared by the deputies Patricia Lemoine and Laure de La Raudière who have just passed in committee, as part of the examination of the bill on the Acceleration and Simplification of Public Action, an amendment to allow change borrower insurance at any time. This weak opening to competition is explained by bad practices banking institutions that do not respond, or only very late, to requests for change of borrower insurance contract ».

Up to € 15,000 savings

Thus, the borrower has in reality no other choice than to keep generally more expensive insurance, note the two parliamentarians. However, by seeking competition, borrowers could, over the total term of the loan, achieve savings ranging from € 6,500 to € 15,000, specifies the amendment resulting from the proposals of the association for the defense of consumers UFC-Que Choisir.

This text, which is due to be debated in public on Monday, could therefore change if it were adopted. And so on protect the purchasing power of consumers threatened by the crisis, explain Patricia Lemoine and Laure de La Raudière.

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