The council authorizes the retroactivity of the annual cancellation of the borrower insurance to the contracts concluded before February 22, 2017.
A decision expected by real estate borrowers
Although few are interested in the issue, all borrowers are concerned by the latest decision of the council. Because if their home loan agreement is prior to 2017, they will now benefit from the annual cancellation of loan insurance. Indeed, since 1 January 2018, all real estate loan insurance contracts are concerned.
For their part, the banks feared this decision on the part of the council. It must be remembered that as soon as parliamentarians announced the adoption of the amendment in 2017, the banking groups raged against this measure. Faced with their appeal, the Council of State, the highest administrative court, had referred the matter to the council.
Banks do not question the annual termination of the borrower’s insurance as a whole. As a reminder, since February 22, 2017, all new mortgage lending contracts may change every year. Thus, on each anniversary date, borrowers are free to find a cheaper offer (from one to two) but whose guarantees are equivalent. On this point, the termination was acquired by the new borrowers.
Banks will have to share the loan insurance market
On the other hand, the wrath of the banks, against the retroactivity of the borrower insurance to all the contracts concluded before February 22, 2017. More clearly, all the holders of a home loan would benefit from the annual cancellation. Until then, only the period of 12 months provided by the law benefited them.
The Sages have therefore rendered their decision today: the annual termination of the loan insurance extends well to all contracts and thus confirms the retroactivity of the Bourquin amendment. Borrowers before February 2017 are therefore free to cancel their current loan insurance. Previously, the few people who had gone to court to obtain a change of insurance had had their case handled on a case-by-case basis. The case law had not yet decided and only a few litigants were successful. From now on, everyone can terminate their contract subject to a 2-month notice period. This news is a real revolution since each borrower can save, depending on his age and his loan, up to several thousand euros.
Banks are therefore forced to open the doors of the borrower insurance market. Experts estimate that this market represents 6 billion euros per year. The decision of the day of the Sages thus puts an end to a long serial that began several years ago.