Borrowers can rejoice.
After the parliamentarians, senators have just passed the bill establishing the right to change borrower insurance on each anniversary date of the contract. This is the time for everyone to review his and try to lower the rating by addressing the competition.
The interest of the measure for borrowers
From January 2018, anyone with a housing loan in the process of reimbursement may terminate the insurance that covers it and replace it without any possibility for the bank to oppose it.
The measure aims to finally free competition, and give purchasing power to the middle class owners. The only condition: find an alternative contract with the same guarantees as those mentioned in the information sheet of the bank at the time of contracting the loan.
This is a boon to borrowers because with low mortgage loan rates , the cost of insurance is almost as high as borrowing interest.
However, for the same profile, the disparities between the various institutions in terms of guarantees and tariffs can be considerable.
The differences are even more marked between the bank group contracts and the individualized formulas of alternative insurers or brokers specializing in mortgage loans.
For a couple of thirties taking a loan of 150,000 euros over 20 years at a nominal rate of 1.5%, the potential savings obtained through delegated insurance can reach 15,600 euros. For a senior who has borrowed the same amount over 12 years, the gain can amount to 9,900 euros.
The points to check in contract
If today, banks still hold nearly 90% of the insurance sector borrower , with the reform, they are likely to see 8 million holders of housing loan contract to compete. However, this product is very profitable to them, since on the 6 billion euros that weighs the market, the margins of the banks represent half. They may therefore be inclined to renegotiate the insurance rate to keep their customers.
For the latter, several points are to be verified, starting with the disability-disability guarantees. If they are compensators, periods of unemployment or parental leave are not covered, the assumption of monthly payments by the banks being limited to the loss of income.
Attention also to franchises and exclusions. The right to be forgotten especially allows the insured person, for example, to no longer declare an old cancerous pathology, avoiding the increase of his contribution.