When you are asked how to make a plumbing connection or how to convert a manual roller shutter to solar, you will find an answer quickly.
But when it comes to calculating the insurance rate, you often turn to a specialist for an explanation. This information is useful as it helps you define the amount of your future monthly payments.
That’s not all, it gives you a precise idea of the overall budget of your mortgage loan. So if you want to have a preview of the insurance cost, take the time to read this article.
📋 Key points: Personally, I consider insurance the most powerful lever to reduce the cost of your loan, knowing that it sometimes accounts for 30% of the total financing cost. For me, it is a crucial calculation step not to blindly delegate to your bank. By understanding the difference between a calculation on initial or remaining capital, you can save several thousand euros over the duration of your loan.
What does the mortgage insurance rate represent?
To finance a real estate project, more and more people turn to the bank. The bank recommends that they subscribe to a mortgage credit insurance.
This is a contract that protects them in case they are unable to proceed with the repayment. In this circumstance, it is the insurance company that guarantees the payment of their monthly installments to the lending institution.
The insurance rate therefore refers to the amount of your annual contribution. It varies depending on your profile, your real estate project, and the characteristics of the contract you have chosen.
📍 My experience: In January 2026, during the renegotiation of my loan in Nantes, I changed insurer thanks to the Lemoine law. I reduced my monthly payment by 42 euros per month without changing my coverage. The lesson learned is simple: banks often offer more expensive group contracts, external delegation is almost always a winner.
Before subscribing to a loan insurance, it is important to determine this amount. It influences the budget of your real estate financing, just like bank interest.
To go deeper, I advise you to calculate your monthly payments which complements this topic well. Properly assessing your borrowing capacity also provides useful insights. And to go further, knowing if buying without a down payment is possible offers interesting perspective.
How to calculate mortgage loan insurance?
The calculation mainly depends on the nature of the chosen contract. It can be radically different for an external insurance and for a group insurance.
Also called individual borrower insurance, the first option relates to an insurance delegation. With this formula, the calculation of contributions is done based on the outstanding capital. Here, the monthly contributions are said to be decreasing.
As for group insurance, it is offered by the financial institution or the bank. It is they who define the rate on the initial amount borrowed. In this context, insurance contributions are fixed throughout the duration of the mortgage loan.
Regardless of the type of contract, it is necessary to master these two calculation techniques before seeking the services of an insurance company or a bank. Once done, you can choose the one that seems profitable to you.
With the calculation based on the outstanding capital, you have the possibility to save money. There is an adjustment of the calculation, because the rate relates to the amount of the remaining loan to be paid and this amount decreases each month.
| Calculation method | Calculation basis | Premium evolution | Ideal profile |
|---|---|---|---|
| Initial capital | Total amount borrowed | Fixed and constant | Short loans |
| Outstanding capital | Amount remaining to be paid | Decreasing | Long loans (20-25 years) |
| Average fixed rate | Average over the duration | Constant | Budget simplicity |
What are the parameters influencing the calculation of mortgage loan insurance?
Except for the duration and the amount of the loan, there are several elements that determine the average amount of insurance. To assess the risk of the insured, the company takes them into account in estimating the monthly contributions.
The nature of the guarantee is one of them. The cost is not at all the same if you subscribe to unemployment insurance and death insurance.
🌍 Did you know? The cost of insurance can vary from one to three times for the same profile depending on whether you choose the bank’s “group” contract or an external “delegation” with a specialized insurer.
The insurer also takes your age into consideration. The older you are, the more risk the bank runs in guaranteeing your mortgage loan. It should be noted that medical history increases with the years. There is therefore a high probability of your inability to repay the loan.
⚠️ Common misconception: Thinking that being 100% insured on a couple (50/50) is sufficient. In case of the death of one spouse, the other will have to continue paying 50% of the installments. For total security, coverage at 200% (100% on each head) is preferable.
Besides that, your profession is very important in the eyes of the insurance company. When your income is stable, they will not have to worry about your situation.
On the other hand, if you work in a risky profession, know that this greatly impacts the cost of insurance. This is the case for a borrower who is a soldier, policeman, firefighter, stuntman, sailor, or many others.
Finally, multiple laws offer you the opportunity to negotiate the insurance rate. For example, there is the Hamon law and the Bourquin amendment.
In any case, remember to compare different contracts before starting a subscription. Many online tools greatly facilitate these tasks for you.
How to properly negotiate your mortgage insurance?
Just as is the case for a mortgage loan, the insurance of a mortgage loan must also be taken into account! Indeed, even if it only represents a few euros on a mortgage loan, insurance can quickly become very expensive over the course of your entire real estate project. Sometimes, individuals who are subscribing to a mortgage loan for the very first time can find themselves in quite delicate situations, where they subscribe to mortgage loan insurances that are not in their favor. Fortunately, some online sites allow you to compare the best mortgage loan insurances available in just a few minutes.
💡 Practical advice: Always compare the TAEA (Annual Effective Insurance Rate) rather than the nominal rate. The TAEA is the only indicator that includes all fees and allows a real comparison of the cost between two offers.
Visit an online comparison tool
To start, do not hesitate to visit an online comparison tool recognized by the general public to make your first mortgage insurance requests. Indeed, it is not necessary to contact all local or online organizations to find good insurance! Generally, once you have contacted a first comparison tool, it will not be necessary to visit other websites or other insurers…
Provide information about your situation
Calculez le coût mensuel de votre assurance sur la base du capital initial :
Soit environ € sur 20 ans.
Once you have chosen the right site to compare the best mortgage loan insurances, it will be time to get serious! For this, do not hesitate to provide fairly clear and precise information about:
- your personal situation
- your professional situation
- your loans
Whether it is about your finances, your current credits, or your work, try not to hide anything during this step!
Indeed, comparators and organizations do not always appreciate discovering new information about their potential clients. If you do this, an insurance organization could even retract its offer and cancel it!
Subscribe directly online
Finally, since the law allows you to subscribe more easily to mortgage loan insurance, and especially to cancel the old mortgage loan insurance, online subscription has never been easier!
For this, you will of course need to complete the quote request you made online with options to choose from. Once you are ready, you can subscribe online in just a few minutes, without needing to travel… To finish, discover this analysis of group vs individual contracts:
✅ Advantages:
– Family protection
– Security for the bank
– Sometimes advantageous taxation
🔍 Drawbacks:
– High total cost
– Medical formalities
– Strict exclusion criteria
