Mortgage credit insurance: what will change for borrowers on September 1, 2022

After a first part set up from June 1 for new borrowers, the Lemoine Law will now apply to all current mortgages from September 1, 2022.

Back in three points on the novelties of the reform voted last February by the parliamentarians.

Termination at any time

The rule is simple: any borrower now has the right to change borrower insurance at any time, and free of charge. This rule has applied since June 1 for new signed insurance contracts. It will come into force from 1er September for those who are already in progress.

This reform makes it possible to simplify a process that has already been amended several times in recent years. While creditor insurance is essential for obtaining a mortgage, it was previously only possible to change it once a year, on the anniversary date of the contract.

To make the change, you must therefore send a registered letter to your bank. The latter then has a period of 10 days to respond to your request for substitution of contract but may refuse the change of insurance. However, in the event of refusal, “the latter must be communicated and justified by a legitimate reason, for example the non-equivalence of guarantees between the two contracts”, explains the website of the Ministry of the Economy.

The new rules are supposed to revive competition in a market very largely dominated by banks.

End of the medical questionnaire

The “Lemoine law”, named after the deputy who authored it, also puts an end to the medical questionnaire for the majority of borrowers. This questionnaire serves as a basis for financial institutions to determine the state of health of a client and therefore the price of the borrower’s insurance that he is obliged to take out to obtain his mortgage.

Since 1er June, anyone who borrows and insures less than €200,000, and whose loan matures before the 60e birthday, is no longer subject to this health examination. A couple can thus borrow up to €400,000 without having to fill out a questionnaire. Some players have already anticipated the reform. Since the end of 2021, Crédit Mutuel has abolished the medical questionnaire for its “loyal” customers.

Reduction of the time limit for the right to be forgotten

People who have been diagnosed with cancer or hepatitis C see, thanks to the reform, the period of “right to be forgotten” reduced by half. If they have been cured for five years, they are not obliged to mention their illness when signing the contract.

The period had already been reduced from twenty years to ten years during a previous reform.

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