If you have decided to take out a mortgage, you are in luck! If the rates are particularly favorable, know that insurance regulations too: you can now compete to renegotiate your loan insurance with your bank.
Save money thanks to the insurance delegation
In addition to the bank loan, you will also need to take out credit insurance. If this is not mandatory, it is very often requested and proposed by your bank at the time of the loan. This credit insurance covers you in case of difficulties and reimburses the loan for you in case of death, disability or incapacity for work.
The insurance can represent up to 30 or even 40% of the cost of the loan and represents the part of the credit for which the banks make the most margin.
To help consumers to borrow less, the state has introduced the principle of insurance delegation : this principle allows the borrower to turn to an insurer other than the bank in which it has contracted his credit.
Despite the fact that this law has been in place for more than 6 years and the insurance market is changing, the French still do not dare to refuse the offer of their bank: indeed, only 12% of those who contract a loan are turning to a third party insurer. Yet this could help many borrowers reduce their monthly payments!
The law goes in your direction!
Since 2010, the Lagarde Law has introduced the principle of delegation of insurance: it is the fact that the bank can not refuse without reason the contract of a third party insurer if the guarantees are equivalent.
Since then, the law has been constantly changing in favor of borrowers : on February 8th, the Parliament finally adopted a measure, voted in joint committee, which will authorize to renegotiate every year the insurance contract for the duration of their loan.
The provision applies to all new loans and loans outstanding from January 2018.
In short, if you are under 40 and you are in great shape, you have every interest in comparing the offers of different insurers before borrowing: you could achieve some savings!