Mortgage Insurance: How Does It Work?

Today, almost everyone who applies for a loan from their bank to buy an apartment or house takes out mortgage insurance. What are the benefits of this insurance? This is how you choose the most interesting mortgage insurance and, as a bonus, the name of a specialist operator who will help you save money on your mortgage insurance.

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4 minutes

What is the advantage of taking out mortgage insurance?

Before you look for a way to perform a simulation of mortgage insurance, it is necessary to know what exactly it is. It is not often that an individual or a household looking for a property purchase or investment has sufficient funds to buy an apartment or house in cash without asking for credit from the bank. According to the website Ré, there are currently around 8 million outstanding mortgages in France today. Although, from a legal point of view, the borrower is in no way required to take out insurance for his mortgage loan, in practice, practically no banker will agree to provide a loan without insurance. Anyone who wants to invest in stone must therefore at least find out about the interests and conditions for such insurance. For the bank, it is a way of protecting itself. The insurance covers the monthly installments of the credit in cases where the borrower can no longer pay them, for example in the event of death, accident or temporary incapacity, or even in the event of loss of work.

What are the benefits of the borrower taking out mortgage insurance?

In the eyes of the borrower, taking out mortgage insurance can therefore rightly be perceived as a restriction. However, it will also make it possible to protect his descendants and assigns from debt in certain cases of default. Most of the time banks have their own insurance service and will try to include their mortgage insurance in the terms of the credit agreement. However, the insurance offered by the banks is not always beneficial for the borrower. It is for this reason that new laws in recent years have aimed to restore a certain decision-making power and freedom to the borrower, so that he can choose the insurance that is the most advantageous in relation to his criteria and needs, taking into account to borrower insurance rate. First there was the Lagarde law, which forces the bank to stipulate in its mortgage offer that the borrower can freely choose the insurance he wants, with the company he chooses. Then the Hamon law (to change the first year for free and at any time) and the Bourquin amendment, which made it possible to change once a year on the anniversary of the loan. Since 2022, the Lemoine Act has further strengthened the borrower’s rights by allowing him to change the mortgage insurance at any time without changing the financial terms of the loan or incurring additional costs.

Why go through a comparator to choose the insurance for your mortgage?

Between banks and insurance companies, it can seem difficult for the borrower to find the mortgage insurance that suits him best, especially when it comes to his first mortgage. Fortunately, there are websites that offer to make a comparison of the different offers. This enables the borrower to see more clearly. Like the Réassurez-moi web platform, some service providers go even further and offer to take care of all the necessary steps to take out free mortgage insurance. This includes comparing the different offers, connecting to the service, but also all the administrative formalities. These are often heavy and complex to take care of, especially for someone who has no experience in finance or real estate.

Conclusion: Thanks to the Lagarde and Lemoine laws, borrowers now have full discretion to choose the mortgage insurance that best suits them. If you want to take stock of the various offers for free, you can request the free expertise from a service provider such as Réassure-moi.

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