Mortgage Insurance: Complete Guide 2026

Mortgage insurance covers the repayment of a loan in the event of the borrower’s death, disability or incapacity for work. In 2026, it represents 25 to 35% of the total cost of a mortgage in Paris, or 15,000 to 40,000 euros on a 500,000-euro loan over 20 years. Insurance delegation can reduce this cost by 30 to 60%.

Introduction

When you borrow to buy an apartment in Paris, the bank systematically requires mortgage insurance. Most buyers’ instinct is to accept the group policy offered by the bank, often in the rush of signing. Yet this cost item is the second biggest savings lever after the interest rate, and paradoxically the least negotiated.

In 2026, the legislative framework favours borrowers: the Lemoine law allows changing insurance at any time, and competition between insurers has brought rates down by 15 to 20% over three years. This guide details how mortgage insurance works, what it costs, and strategies for optimising it in the Parisian context.

Contents

• How mortgage insurance works and its coverage
• The real cost of mortgage insurance in Paris
• Group policy vs delegation: the comparison
• The Lemoine law: change insurance at any time
• Special cases: high-risk borrowers and co-borrowers
• Mortgage insurance in your purchase strategy

How it works and coverage

Mortgage insurance covers four main risks. The death guarantee settles the outstanding capital in the event of the borrower’s death. The PTIA guarantee (Total and Irreversible Loss of Autonomy) applies if the borrower can no longer carry out any activity. The ITT guarantee (Total Temporary Incapacity for Work) covers monthly payments during sick leave. The IPP/IPT guarantee (Permanent Partial or Total Disability) covers situations of lasting disability.

For a primary residence purchase, banks generally require all four guarantees. For a buy-to-let investment, only the death and PTIA guarantees are usually required, reducing the premium by 30 to 40%.

The coverage ratio defines the percentage of capital covered by each co-borrower. For a couple borrowing 600,000 euros, a 50/50 ratio means each is covered for 300,000 euros. A 100/100 ratio offers maximum protection but doubles the insurance cost.

The real cost of mortgage insurance in Paris

The cost of borrower insurance is expressed as the TAEA (Annual Effective Insurance Rate), which must appear in the loan offer. In 2026, average rates range from 0.10% to 0.50% of the borrowed capital depending on age and health profile.

For a 35-year-old borrower, non-smoker, in good health, borrowing 500,000 euros over 20 years, the bank’s group policy costs an average of 0.34%, or approximately 28,000 euros over the total loan period. This amount adds to the annual percentage rate and weighs significantly on the total cost of the transaction.

At 45, the same profile pays around 0.45%, or 37,500 euros. At 55, premiums can reach 0.60 to 0.80%, making insurance delegation even more relevant.

For the typical Parisian acquisitions of our clients, between 500,000 and 1,500,000 euros, insurance often represents the third largest expense after the property price and notary fees.

Group policy vs delegation

The group policy is the insurance offered by the lending bank. It pools risks across all borrowers, making it uncompetitive for young, healthy profiles. Its main advantage is simplicity: a single point of contact, a simplified application.

Insurance delegation involves subscribing to an individual policy with an external insurer. Since the Lagarde law (2010), the bank cannot refuse delegation if the coverage is equivalent. The Hamon law (2014) allowed switching in the first year, and the Lemoine law (2022) authorises switching at any time.

Consider a concrete example for a purchase in the 15th arrondissement. A couple aged 38 and 40 borrows 700,000 euros over 20 years. The bank’s group policy offers a TAEA of 0.36%, for a total cost of 50,400 euros. With delegation, an individual policy at a TAEA of 0.15% brings the cost to 21,000 euros. The saving reaches 29,400 euros, the equivalent of a complete bathroom and kitchen renovation.

The equivalence criteria are defined by the CCSF (Financial Sector Advisory Committee). They cover 18 guarantee criteria that the delegation policy must match at the same level as the group policy. Your broker or property hunter can assist you in this comparison.

The Lemoine law

The Lemoine law, which came into force in 2022, profoundly changed the borrower insurance market in France. Three major provisions apply in 2026.

Cancellation at any time allows changing insurance without waiting for an anniversary date, free of charge, on the sole condition that the new policy offers equivalent coverage. The bank has 10 working days to accept or provide a reasoned refusal.

The removal of the health questionnaire applies for loans where the insured portion does not exceed 200,000 euros per borrower and where the term falls before the borrower’s 60th birthday. For a 400,000-euro loan shared between two people (200,000 euros each), this provision significantly simplifies the process.

The right to be forgotten reduces the period after which a former cancer patient no longer needs to declare their condition. This period has been reduced from 10 to 5 years.

In practice, only 15% of borrowers have changed insurance since the Lemoine law came into force, while 80% could benefit financially. This is one of the systematic recommendations our apartment hunters make to their clients during the financing stage.

Special cases

Borrowers with aggravated health risks benefit from the AERAS convention (Insuring and Borrowing with Aggravated Health Risk). This framework provides three levels of application review and caps surcharges. For loans below 420,000 euros, the surcharge cannot exceed 1.4 percentage points.

For expatriates buying in Paris from abroad, borrower insurance can pose specific difficulties. Some policies exclude coverage in the country of residence or apply surcharges for extended stays abroad. Insurance delegation with an insurer specialising in non-residents generally solves this problem.

Co-borrowers must decide on the coverage ratio allocation based on their respective incomes and family situation. The 100/100 ratio, the most protective, is recommended for families. The 70/30 ratio, adjusted to income, optimises cost while maintaining significant coverage.

Mortgage insurance in your purchase strategy

Mortgage insurance should not be treated as an administrative formality. It is a genuine negotiation lever in your acquisition strategy.

When preparing your financing file, systematically request the TAEA breakdown and compare at least three delegation offers. Include the insurance cost in the total cost calculation, alongside the nominal rate, application fees and notary fees.

If you have already signed with a group policy, the Lemoine law allows you to switch at any time. A switch made in the first two years of the loan, when the outstanding capital is still high, maximises savings.

At Home Select, our property hunters integrate borrower insurance optimisation into the overall support for every acquisition. For a purchase in the sought-after arrondissements of Paris, every euro saved on insurance can be reinvested in the quality of the property.

FAQ

Is mortgage insurance mandatory?

No law requires borrower insurance. In practice, no bank will lend without insurance for a property purchase. It is therefore a contractual obligation, not a legal one. However, the bank cannot force you to accept its own policy.

How much can you save with insurance delegation?

Insurance delegation allows savings of 30 to 60% compared to the bank’s group policy. For a 500,000 euro loan over 20 years, the savings range from 8,000 to 15,000 euros depending on the borrower’s profile.

Can you change mortgage insurance during the loan?

Yes, the Lemoine law (2022) allows you to cancel and change borrower insurance at any time, free of charge and without waiting for an anniversary date. The bank has 10 days to accept or refuse, only if the coverage is not equivalent.

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Are you preparing your financing for a purchase in Paris? Our apartment hunters guide you towards the best insurance and lending strategies to optimise the total cost of your acquisition. Book an appointment with our team.