In 2025, the rate of mortgage loan insurance is a decisive factor to take into account when calculating the total cost of a home loan.
While borrowing rates have been falling since the end of 2024, many buyers are questioning the real cost of their credit insurance.
In this context, it is essential to understand how these rates are set, how they evolve, and what options are available to reduce their impact on the total budget of your property purchase.
Here is a practical guide to help you make the right choices when it comes to mortgage loan insurance rates in 2025.
What is mortgage loan insurance?
Taking out borrower insurance is now an essential step to secure your loan and property purchase. While not required by law, this compulsory insurance is systematically demanded by lending institutions to guarantee the repayment of the loan in the event of the borrower's default.
- It therefore acts as protection for both the bank and the buyer, covering major risks that could compromise the borrower's ability to repay. In fact, it helps to cope with unforeseen events such as death, disability, or inability to work, for example, which would make the borrower unable to meet their repayments.
- Depending on the type of contract, the insurance can be taken out with the bank itself (this is known as group insurance) or with an external insurer, often offering coverage better suited to the borrower’s profile.
- In addition to securing the loan, borrower insurance is a key element in the financial structuring of a property project, as it directly influences the overall cost of the loan.
Why is insurance often essential when borrowing?
To borrow money to buy a house, an apartment, or a piece of land, it is very often necessary to have a solid personal contribution and to insure your loan. Did you know?
Even though no legal text makes borrower insurance legally mandatory, in practice, no bank will grant a loan without this coverage. It is a systematic banking requirement: for the lending institution, it is a way to ensure that the borrowed capital will be repaid, regardless of the borrower’s personal circumstances.
In other words, banks want to protect themselves against any risk of default in the event of a major incident, such as death or disability. Insurance therefore becomes an essential condition for obtaining a loan, especially since the amounts involved are often significant.
It offers not only security for the lending institution, which is reimbursed by the insurer in case of a claim, but also for the borrower and their family, who can keep their home despite life’s uncertainties. Ultimately, this risk coverage reassures all parties and allows a property project to move forward with greater peace of mind.
What coverage is included in loan insurance?
A borrower insurance contract includes several essential types of coverage that vary according to profiles, loan amounts, and insurers’ policies.
- The most common is death coverage, which provides for the repayment of the remaining capital in the event of the insured’s death.
- Next comes PTIA coverage (Total and Irreversible Loss of Autonomy), triggered when an accident or illness permanently prevents the borrower from carrying out any paid activity.
- ITT coverage (Temporary Work Incapacity) covers extended sick leave or work stoppage.
- Finally, some mortgage loan insurance policies include job loss coverage, usually offered as an option.
Not to be confused with thesecurity deposit for a property purchase, these types of coverage are essential to ensure the borrower is protected throughout the duration of the loan. The more coverage there is, the more protective the insurance—but also the more expensive. It is therefore crucial to find the right balance between protection and cost, depending on your profile and property project.
What is the average borrower insurance rate in 2025?
The average borrower insurance rate in 2025 is closely linked to the profile of the insured, the selected guarantees, the duration, and the amount of the loan.
In 2025, borrower insurance rates remain stable compared to the end of 2024. A slight increase can be observed among some insurers due to the evolution of public health risks and regulatory adjustments.
- For a young and healthy borrower, the cost of loan insurance can go as low as 0.10% of the borrowed capital.
- Conversely, for an older borrower or one presenting aggravated risks, rates can reach or exceed 0.60% for 25-year loans.
- The type of contract, whether “group insurance” or “individual insurance,” also plays a key role. External insurers often offer more competitive rates than banks. On average, borrowers opting for individual insurance pay between 0.15% and 0.30%, depending on the level of coverage and the borrower's profile.
- The monthly premium can also represent a significant portion of credit-related expenses, which is why it is recommended to optimize this choice as early as the mortgage simulation phase.
Average borrower insurance rates according to the borrower's profile
The borrower's profile directly influences the applied insurance rate.
A young non-smoking borrower under the age of 30, in good health, may benefit from a rate between 0.09% and 0.15%. Conversely, a senior borrower over 55, or a person with a high-risk profession, will see a significantly higher rate.
The presence of aggravated risks, such as medical history or a declared condition, can lead to a surcharge, or even to the exclusion of certain guarantees. That’s why the health questionnaire—now optional for loans under €200,000 thanks to the Lemoine law—remains a key element in insurers' risk assessments.
Today, pricing is becoming increasingly customizable and personalized. Platforms allow borrowers to instantly calculate personalized rates, based on an initial analysis of their profile, including age, lifestyle, and loan characteristics.
Evolution of borrower insurance rates since 2020 and projections for 2026
Since 2020, mortgage insurance rates have experienced several phases.
- Initially stable at very low levels, rates began to rise slightly starting in 2022, linked to the increase in interest rates and inflation.
- In 2023 and 2024, this upward trend continued moderately, driven by a revision of mortality tables and increased caution from insurers amid an uncertain economic context.
- In 2025, the average rate stabilized, with prospects of normalization. The more flexible monetary policy announced by the ECB could help contain further increases and even promote historically low rates for certain borrower profiles.
- However, observers remain cautious regarding developments in 2026, anticipating possible stagnation or a slight decline, provided that health and economic risks remain under control.
Insurers are also working to refine their pricing models using anonymized health data, potentially setting a trend in 2026 toward more personalization and easier access to borrower insurance.
How is the borrower insurance rate calculated?
The method of calculating the insurance rate can significantly impact the total cost of the loan. Two approaches coexist on the market: calculation based on the borrowed capital and calculation based on the remaining capital. Each method has its advantages and effects on monthly premiums.
- When based on the borrowed capital, the insurance rate remains constant throughout the loan term. This provides better visibility but generally leads to a higher long-term cost.
- In contrast, calculation based on the remaining capital offers decreasing pricing: premiums decline as the capital is repaid.
- In addition to this dual calculation method, the rate is influenced by several factors:
- The age of the insured,
- Their health condition,
- The insured share (quotité),
- And of course the loan duration (the longer it is, the higher the risk for the insurer, and therefore the higher the potential rate).
Criteria influencing the borrower insurance rate
The borrower insurance rate is determined based on a combination of parameters.
The first criterion is the age of the insured: the older they are, the higher the statistical risk of a claim, resulting in a higher rate.
Health status is also critical: borrowers with medical histories or risky behaviors (such as smoking) may face surcharges or exclusions. A high-risk profession (military, professional athletes, workers at heights...) is also a major factor for insurers.
Furthermore, the chosen insured share for each borrower (in the case of co-borrowers) directly impacts the premium amount. Insuring each borrower at 100% means that the entire capital is covered by both, which increases security but also the cost.
Borrowed capital or remaining capital: which formula is more advantageous?
Choosing between a rate applied to the borrowed capital or to the remaining capital can lead to a significant cost difference over the duration of the loan.
- In a contract based on the borrowed capital, the insurance premiums remain fixed, which can simplify budgeting.
- However, by choosing a contract based on the remaining capital, premiums decrease gradually as the capital is repaid. This allows savings over time, especially in the case of early repayment or loan restructuring.
Some insurers and brokers now offer simulations to compare both options and determine which offers the best balance between initial and final cost. This choice should be made before financing, ideally with the support of an insurance broker or a Capifrance real estate advisor.
What is the difference between the TAEA and the borrower insurance rate?
In the realm of mortgage insurance, it’s common to encounter two similar but distinct terms: the TAEA (Annual Effective Insurance Rate) and the borrower insurance rate. Understanding the difference between them is essential to effectively compare offers and choose the most advantageous insurance.
The borrower insurance rate
It is most often expressed as an annual percentage applied to the borrowed capital. For example, a rate of 0.30% means the insurance will cost 0.30% of the loan amount each year. This rate is easy to calculate, but it doesn’t always reflect the full cost of insurance, as it doesn’t consider payment terms, additional fees, or changes in the insured capital.
The Annual Effective Insurance Rate (TAEA)
By contrast, the TAEA is a standardized and mandatory indicator since the Hamon Law of 2015. It functions exactly like the APR (Annual Percentage Rate) but applies to insurance. It includes all costs related to the insurance: premiums, administrative fees, payment frequency, etc., and expresses them as an annual percentage, allowing comparison across insurance types. This makes it a reliable and essential tool for comparing two offers with equivalent guarantees.
Let’s take an example
Two contracts may show the same nominal rate (0.30%), but if one is paid monthly with additional fees and the other annually with no extra costs, the TAEA will reveal a significant difference between the two by showing the real cost of each offer.
In summary
- The borrower insurance rate gives you an idea of the gross cost of the insurance.
- The TAEA tells you the actual cost of the insurance over the life of the loan, allowing you to effectively compare multiple contracts.
When comparing multiple insurance offers, always prioritize the TAEA for a fair and complete comparison—especially if you are considering insurance delegation or renegotiation during the loan term.
Can you change or negotiate your mortgage insurance in 2025?
Switching mortgage insurance is now an accessible and fully regulated process.
In 2025, the rules surrounding insurance delegation allow borrowers to compare and select more advantageous coverage—even after signing the loan. This flexibility, still little known to the general public, can lead to significant savings, especially when moving from a bank group contract to an individual insurance policy.
Thanks to the Lemoine Law, borrowers now have the right to cancel their insurance at any time, free of charge or penalties. This major step forward allows for more dynamic insurance negotiations throughout the life of the loan. Borrowers are no longer tied to the bank’s initial offer, opening the door to true competition between insurers.
To make the most of this opportunity, it’s recommended to regularly compare rates and coverage using an insurance comparison tool or by consulting a broker. Don’t know one? Ask your Capifrance advisor for a trusted recommendation.
The laws that let you change mortgage insurance
Over the past few years, several laws have gradually strengthened borrowers' rights:
- The Hamon Law first allowed policy changes during the first year of the contract.
- The Bourquin Law enabled annual cancellation on the policy anniversary date.
- The Lemoine Law, which came into force in 2022, profoundly changed the borrower insurance landscape. It gives all borrowers the right to cancel their policy at any time for any ongoing loan, as long as the new policy offers equivalent coverage—a legal requirement for the bank to approve the switch.
By 2025, these legal frameworks are fully operational, making it easier for borrowers to change insurers while increasing competition across the market. Using a reliable comparison tool remains essential to benefit from this flexibility.
Comparing offers to save money
Comparing policies can significantly lower the cost of mortgage insurance. For equal coverage, the price difference between a bank’s group insurance and an individual policy can amount to thousands of euros over the life of the loan.
These savings are made possible by the growing number of offers available and the rise of specialized platforms. A mortgage insurance broker can also play a key role by identifying the most competitive contracts based on your profile and project.
Today, personalized online simulations are available in just a few clicks. They help you anticipate potential savings and plan an insurance switch at the right time while staying compliant with lender requirements.
How to reduce your mortgage insurance cost in 2025
Reducing your borrower insurance cost is within everyone's reach—with the right approach and information. In 2025, with stabilized interest rates and increased competition among insurers, optimizing this expense is easier than ever.
Rule number one: don’t settle for your bank’s initial offer. With insurance renegotiation and delegation, you can secure a more suitable and affordable policy. Start by comparing quotes early in your project or ask for a review during the life of your loan.
A mortgage broker, in partnership with an insurance broker, can support you throughout the process. Capifrance advisors, for example, work closely with financing specialists to offer tailored solutions combining both credit and insurance, adapted to your profile.
Why work with a broker or a Capifrance advisor?
Working with a Capifrance advisor means benefiting from personalized guidance throughout your real estate project. These local professionals will connect you with top mortgage and insurance deals through their trusted broker partners.
Their market knowledge and proximity to buyers give you access to more competitive financing solutions than traditional banks. By optimizing both your loan and your insurance, they help you significantly reduce your total acquisition costs.
Tailoring coverage to your needs
- An insurance policy that’s tailored to your real needs is both effective and economical. For instance, public sector employees can often waive certain costly options if they already benefit from strong workplace protection.
- Likewise, for joint loans, adjusting the insurance share (quotité) can be cost-effective. Covering each borrower at 50% or at 70/30 based on income is often more efficient than both being insured at 100%.
- Lastly, aligning the coverage duration with the loan term or revisiting certain options halfway through can also lower your costs without reducing essential protection.
Conclusion
In 2025, choosing the right mortgage insurance can be a powerful way to save. From comparing rates and choosing insurance delegation to getting professional advice—every decision counts toward your real estate budget.
Key takeaways
- The mortgage insurance rate in 2025 depends on your profile and coverage.
- You can cancel and change your insurance at any time thanks to the Lemoine Law.
- The calculation method (initial loan amount vs. outstanding balance) affects total cost.
- Brokers and Capifrance advisors help you negotiate better deals.
- Adapting your coverage to your needs is a winning strategy.
Need help with your real estate project?
Contact your local Capifrance real estate advisor and benefit from our local expertise to successfully complete your purchase.
Take advantage of preferred financing solutions with our broker partners to get the best mortgage and insurance rates.
Regularly check our real estate listings across France to find the perfect property for your lifestyle or investment.
If you’re selling to buy your next home, Capifrance also offers a personalized professional property valuation.
FAQ – Common questions about mortgage insurance rates
What’s the average mortgage insurance rate in 2025?
Between 0.10% and 0.60%, depending on your profile and the coverage.
Can I change my mortgage insurance after signing the loan?
Yes, thanks to the Lemoine Law, you can switch insurance at any time.
What’s the difference between group insurance and delegated insurance?
Group insurance is offered by the bank. Delegated insurance is external—and often cheaper.
How can I lower the cost of mortgage insurance?
Compare offers, adjust coverage, and choose a policy based on the outstanding loan balance.
What role does a Capifrance advisor play?
They guide you toward the best financing and insurance solutions through our broker network.
Author:
Frédéric REMY, Director of Network Development at Capifrance
“As a real estate professional with several years of experience at Capifrance, I’m here to share key advice to help you succeed in your property project with the support of our advisors.”
