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Loan Insurance & Loans: Change in Cost Under Loan

The borrower insurance covers you accidents of life likely to impact you (loss of job, illness, disability, death). It is not mandatory, but is very often required by the lending institution. At the time of the subscription, the contract specifies an effective date and its duration as well as an interest rate which will remain fixed until the end of the contract.

Thus, all the monthly payments are known and fixed, protecting you from any unfavorable tariff evolution.

On the other hand, more favorable market conditions may emerge. It is then that you may be tempted by the termination of your loan insurance, unless you prefer to change mortgage insurance after renegotiation.

Termination of loan insurance: how to do it?

You want to renegotiate your home loan insurance through the Hamon law ? This is the way to go.

You must have an offer, at least equivalent in terms of guarantees, offered at a cost to the most advantageous. As a first step, submit this offer for approval to your lender (if, however, it was not also your insurer). Then, acceptance gained, send a registered letter, at the latest 15 days before the end of the first year of contract signifying your wish to terminate.

You should also know that changing mortgage insurance insurance after one year is now possible thanks to the Sapin 2 law. Since February 22, 2017, for any new contract, cancellation is possible every year. To do this, simply send a registered letter to your insurer two months before the due date specifying the effective date of your new contract.

Renegotiation or termination?

To avoid red tape, you can try renegotiating your mortgage without changing insurance. Ask your current insurer and, based on the proposal you have selected, you may benefit from the granting of a “fidelity bonus” that will cancel at least the extra cost that you support… If so, a simple The amendment to the contract is sufficient to realize your theoretical gain. Otherwise, the termination of the loan insurance is beneficial to you and a new contract will be drafted.