Can I replace the mortgage insurance offered by my bank with a cheaper or better-suited policy?
Am I allowed to change borrower’s insurance during the term of my home loan, and under what conditions?
In this comprehensive article, we explain how to change your mortgage loan insurance, which rules apply, and what financial gains you can expect.
We also define borrower’s insurance, its guarantees, how it works, and the differences between group contracts and delegated insurance.
You will find an overview of the legal framework (Lagarde Act, Hamon Act, Bourquin Amendment, Lemoine Act), practical advice on comparing offers, and a numerical example based on a house purchase. At the end of the article, you will find a sample letter for changing your loan insurance.
Contact your local Capifrance advisor for personalized and professional support to secure all your real estate buying and selling projects.
Understanding Mortgage Loan Insurance: Definition, Purpose, and How It Works
Mortgage loan insurance is an insurance contract that guarantees the repayment of a home loan. It protects both the bank and the borrower’s household if an insured event occurs. Covered risks typically include death, total and irreversible loss of autonomy (TILA), permanent disability, and temporary incapacity for work, depending on the chosen guarantees.
The contract provides the bank with the security required to grant a loan. It also protects the borrower’s family if the borrower becomes unable to repay. Insurance is not legally mandatory. However, lending institutions almost systematically require it in order to grant a loan.
There are two main options: the group contract offered by the bank and delegated insurance taken out with an external insurer. Delegation allows you to choose an individual contract that is often less expensive or better suited to your profile. The only condition is that the new contract must provide a level of guarantees at least equivalent to those required by the bank.
The standardized information sheet provided with the loan offer specifies the minimum guarantees required. This document is essential for comparing offers and checking equivalence. The insured share indicates the portion of capital covered for each borrower. The cost of insurance, measured by the Annual Percentage Rate of Insurance (APRI / TAEA), depends on age, health status, occupation, loan amount, and loan term.
Comparing insurance cost, exclusions, and general conditions helps reduce monthly payments over the life of the loan. Also remember to check waiting periods and compensation terms in the event of a claim.
What Is Borrower’s Insurance?
Borrower’s insurance is the contract that partially or fully covers loan repayments if the borrower is affected by an insured event. The main beneficiaries are the bank and, indirectly, the borrower’s relatives. Depending on the guarantee, the insurer repays the outstanding capital or the monthly installments.
Why Take Out Mortgage Loan Insurance?
The bank requires insurance to limit the risk of default. For the borrower, it is a safety net that protects the household in the event of death, disability, or incapacity. Without insurance, it is very difficult to obtain a home loan from a lending institution.
Changing Mortgage Loan Insurance: Legal Framework and Recent Developments
Regulations have evolved significantly since 2010. The Lagarde Act (2010) introduced freedom of choice between group contracts and delegated insurance. The Hamon Act (2014) allowed borrowers to change insurance during the first year after signing. The Bourquin Amendment (2017) added the possibility of annual cancellation on each anniversary date.
Finally, the Lemoine Act (2022) introduced intra-annual cancellation. It is now possible to substitute insurance at any time, free of charge and without penalties, provided that the new contract offers guarantees at least equivalent. These laws promote competition and give more power to borrowers.
The central condition remains equivalence of guarantees. The bank may refuse a substitution if the proposed guarantees are insufficient. In the event of refusal, the bank must justify its decision in writing. It has 10 business days to respond to a substitution request.
Some situations may be specific. Loans not intended for residential use or certain professional loans are not always covered by the same rules. In such cases, check the application of the Insurance Code and, if necessary, seek advice from a broker or a legal professional.
Keep all useful documents: loan offer, standardized information sheet, certificates, and written correspondence. A complete file greatly facilitates the substitution process and the bank’s response.
History of Laws on Borrower’s Insurance
The Lagarde Act (2010) confirmed the possibility of refusing the group contract and choosing individual insurance. The Hamon Act (2014) authorized substitution during the first year. The Bourquin Amendment (2017) made annual cancellation on the due date possible.
The Lemoine Act (2022) then generalized intra-annual cancellation. Since then, borrowers can change insurance at any time. These developments have gradually liberalized the market and strengthened borrowers’ purchasing power.
The Lemoine Act: Changing Contracts at Any Time, Free of Charge
The Lemoine Act removed the anniversary date constraint for many contracts. Substitution can now be requested at any time during the life of the loan. The bank must respond within 10 business days. If it refuses, the refusal must be reasoned and explicit.
The law also simplified certain medical formalities for modest loans. In addition, the right to be forgotten has been shortened for certain illnesses, improving access to competitive contracts for people who have recovered.
Why and When Should You Change Borrower’s Insurance?
Changing borrower’s insurance often leads to substantial savings. Switching from a group contract to delegated insurance can reduce the total cost. It can also improve coverage or adapt it to a new personal situation.
Common reasons include: quitting smoking, changing occupation, improvement in health, repayment of a large portion of capital, or a desire to reduce monthly payments. First-time buyers and rental investors can gain a significant financial advantage by choosing the best offer from the outset.
The Lemoine Act makes timing more flexible: you can change at subscription, at the former anniversary date, or at any time during the loan. The key is to check equivalence and anticipate the process to avoid contract overlap.
Warning: do not change just for the sake of changing. A cheaper contract may include exclusions or limits that weaken real protection. Compare the APRI, guarantees, exclusions, and insured share before deciding.
Good Reasons to Change Mortgage Loan Insurance
Savings: the main argument is financial. Individual contracts often offer lower APRIs.
Customization: an external contract allows guarantees to be adapted to your real profile and needs.
Profile changes: improved health or professional situation may justify a change.
At Subscription or During the Loan: The Right Times
At subscription, choosing delegation allows you to obtain the best rate from the start. During the loan, the Lemoine Act allows substitution at any time. Before any request, obtain the standardized information sheet and prepare a complete file.
How to Compare and Choose a New Borrower’s Insurance Policy
Start with the standardized information sheet provided with the loan offer. It indicates the minimum guarantees required by the bank. Then compare the APRI, guarantees (death, TILA, disability, incapacity), exclusions, and coverage conditions.
Check how premiums are calculated: on initial capital or on outstanding capital. The APRI enables homogeneous comparison. Also check the insured share: it must cover at least 100% of the capital according to the agreed distribution between co-borrowers.
Ask the new insurer these questions: are there waiting periods? What exclusions apply? Is coverage lump-sum or indemnity-based? Does the contract cover the borrower’s occupation? These elements determine the real quality of protection.
A certificate of equivalence of guarantees greatly facilitates bank acceptance. Request this document from the new insurer to secure the substitution.
A comparison tool provides a first overview of rates. An insurance broker offers more personalized support: negotiating, checking equivalence, and handling bank procedures. For atypical profiles, a broker is often the most effective solution.
Key Criteria for Choosing Your New Mortgage Loan Insurance
Prioritize: offered guarantees, APRI, exclusions, insured share, compensation method, waiting periods, and age- or profession-related conditions. Check the insurer’s financial strength and customer feedback on claims handling.
Using a Broker or a Comparison Tool: Advantages and Advice
A comparison tool saves time and identifies competitive offers. A broker negotiates, checks equivalence, and secures the process. This is particularly useful for high-risk profiles or borrowers seeking full support.
Practical Steps to Change Mortgage Loan Insurance
The process follows four clear steps: comparison, subscription, substitution request to the bank, and implementation. Anticipate and gather all necessary documents to speed up processing.
Step 1: obtain several detailed quotes and compare APRI and guarantees.
Step 2: take out the new contract and request the equivalence certificate.
Step 3: send the substitution request to the bank, preferably by registered letter or via the durable medium provided.
The bank has 10 business days to respond. If it accepts, it issues a free amendment to the loan contract. If it refuses, the refusal must be justified and based on lack of equivalence. Keep all written correspondence.
Step 4: sign the amendment and check the effective date of the new contract. Do not cancel the old contract before receiving the bank’s written confirmation. This avoids any risk of coverage interruption or overlap.
Taking Out the New Contract with an External Insurer
Complete the subscription file carefully. Depending on the amount and age, a medical questionnaire may be required. The Lemoine Act has simplified certain formalities for modest loans and younger borrowers.
Sending the Substitution Request to the Bank and Tracking the File
Write a clear letter and attach the equivalence certificate and the new contract. Send the request by registered mail with acknowledgment of receipt or via the secure channel indicated by the bank. Record the sending date to calculate the 10-day period.
Pitfalls to Avoid and Best Practices for a Successful Change
The most common mistake is failing to meet equivalence of guarantees. Without equivalence, the bank may refuse. Another pitfall is focusing only on price and ignoring exclusions, waiting periods, and claims service quality.
Never cancel the old contract before receiving the bank’s written confirmation and the effective date of the new contract. Anticipate deadlines and prepare a complete file to avoid delays. Keep all documents and proof of sending.
Best practice: be assisted by a broker or advisor. They check equivalence, negotiate terms, and follow up with the bank if needed. This limits risks and simplifies the process.
Not Respecting Equivalence of Guarantees
If the new contract offers inferior guarantees, the bank may legitimately refuse the substitution. A reasoned refusal must be precise and based on lack of equivalence. In case of doubt, have the guarantees reviewed by a professional.
Anticipating Deadlines and Formalities to Avoid Overlap
Plan the substitution several weeks before a key deadline. Check business days and sending methods. A missing document can lengthen processing time and maintain the original contract.
Special Cases and Specific Situations in 2026: New Builds, Life Annuity, Rental, Retail and Business
Some projects require special attention. For new builds, ensure insurance covers all loans in the file, including subsidized loans such as zero-interest loans or social home ownership loans. Guarantees linked to works must be included if necessary.
Life annuity raises issues of age, taxation, and duration. For seniors, check age limits, exclusions, and caps. Solutions exist, but vary widely by insurer.
For rental investment, the bank may require additional guarantees. Delegation remains possible if equivalence is respected. Professional and commercial loans sometimes follow different rules. Check eligibility for intra-annual cancellation and consult a specialist if needed.
Changing Insurance for a New-Build Mortgage Loan
For new builds, clearly specify the nature of the loans to be insured. Explicitly request that the standardized sheet include elements related to works. Obtain bank approval before any cancellation.
Borrower’s Insurance for Rental, Retail, and Business Investments
Check the use of the property (residential, mixed, professional). For strictly professional loans, some rules differ. A broker or specialized advisor will help secure the substitution and find a suitable contract.
Sample Letter for Changing Mortgage Loan Insurance
Example Letter to Send to Your Bank
Registered letter with acknowledgment of receipt
Subject: Request for substitution of borrower’s insurance – Loan reference no. [reference]
Dear Sir, Madam,
I, the undersigned [Last name, First name], borrower under mortgage loan no. [reference] taken out on [date of signature], hereby inform you of my decision to substitute the current insurance with a new borrower’s insurance policy taken out with [name of new insurer].
Please find attached the equivalence certificate guaranteeing a level of coverage at least equivalent to the guarantees required by your institution.
In accordance with the applicable legal provisions, I kindly ask you to confirm your agreement in writing within 10 business days.
I remain at your disposal for any further information.
Yours faithfully,
[Signature]
Practical tip: attach the standardized information sheet, keep a copy of the letter and the acknowledgment of receipt. If the bank requests additional documents, provide them promptly to avoid delays.
Financial Impact of Changing Mortgage Loan Insurance: Numerical Example
A simple illustration to understand the financial effect of substitution. Let us consider a loan of €300,000 over 20 years.
Scenario A (bank group contract): APRI = 0.40%
Scenario B (external individual contract): APRI = 0.15%
Simplified calculation over the term:
Total insurance cost = borrowed capital × APRI × duration
Bank insurance cost = 300,000 × 0.40% × 20 = €24,000
External insurance cost = 300,000 × 0.15% × 20 = €9,000
Potential saving = €15,000 over the term, or about €62 per month.
These figures give an order of magnitude. The actual calculation may vary: on initial capital or on outstanding capital. The insured share and chosen guarantees also influence the final amount.
For a precise calculation, request a simulation based on the APRI. A broker or advisor can provide an estimate tailored to your profile and financing plan.
Example of Savings Achieved by Changing Insurance on a €300,000 Loan
In the example above, substitution would save €15,000 over 20 years. This amount depends on APRI, insured share, age, and health. Savings are often greater for long loans or large amounts.
How to Calculate and Understand the Annual Percentage Rate of Insurance (APRI / TAEA)
The APRI expresses the annual cost of insurance relative to the borrowed capital. It allows comparison between offers using different calculation methods. Always compare on the basis of equivalent guarantees.
Supporting Your Real Estate Project: The Key Role of the Local Real Estate Advisor
A local real estate advisor provides concrete support: knowledge of the market, guidance toward financial partners, and connections with reliable brokers. They coordinate financing search, negotiation, and loan insurance.
The advisor helps build a complete file for the bank and prepare the substitution request. They know which arguments to use to negotiate favorable conditions. Their network facilitates obtaining comparative quotes and analyzing general terms.
For new builds, life annuity, rental investment, luxury property, or professional loans, local support secures procedures. Contact a Capifrance advisor to be put in touch with a broker if needed.
Conclusion
Changing mortgage loan insurance is possible and helps control insurance costs over the life of the loan.
The Lemoine Act allows substitution at any time, subject to equivalence of guarantees.
Comparing APRI, guarantees (death, disability, incapacity), and exclusions is essential before starting.
Preparing a complete file (loan offer, standardized sheet, equivalence certificate) facilitates bank approval.
Avoid pitfalls: do not change without checking equivalence and anticipate formalities to avoid overlap.
For special cases (new builds, life annuity, rental, retail, business), seek support from a specialist or broker.
Contact a local Capifrance real estate advisor for support at every stage of your project.
FAQ
Can you change mortgage loan insurance at any time?
Yes. Since the 2022 Lemoine Act, you can substitute insurance at any time, free of charge. The new contract must offer at least equivalent guarantees.
When should you renegotiate mortgage loan insurance?
As soon as you find a more suitable and advantageous contract. Anticipate the process to avoid overlap and always check equivalence.
How can you reduce mortgage loan insurance costs?
Use delegated insurance, compare APRI, adjust the insured share, and use a broker to negotiate the best conditions.
What is the average price of mortgage loan insurance?
The price varies by age, health, occupation, amount, and term. In 2025–2026, APRI generally ranges between 0.1% and 1% depending on profiles.
How do you change mortgage loan insurance?
Find an equivalent new contract, subscribe, send a substitution request with the equivalence certificate to your bank, and wait for written confirmation within 10 business days.
How long does it take to change mortgage loan insurance?
The bank must respond within 10 business days. The full process usually takes a few weeks depending on
Author :
Frédéric Rémy – Director of Commercial Performance
A real estate professional for several years within the Capifrance network, I would like to share with you some essential advice to help you succeed in your real estate project with the support of our advisors.
