French low mortgage interest rates have encouraged a lot of property owners to start discussing with their lender about a rate reduction. But another issue is the insurance.

It is not possible in most cases to change insurance on a mortgage that was agreed before 2014. The Hamon law of March 17th, 2014 has eased this principle by allowing to cancel or to renegotiate the insurance contract, but only for contracts signed after the law came into force and within one year only.

For all previous contracts, the French Cours de cassation reminded recently that they are subjected to the special legislation of the consumer code which does not allow termination or substitution of insurance contract. Mortgage agreed previous to law Hamon’s implementation do not allow to substitute an insurance company by another one after the loan was signed.

To change the insurance contract on a mortgage agreed before 2014, the borrower can nevertheless terminate his current mortgage and sign a new one with a different lender. To make it less costly a good advice is to negotiate a zero penalty in case of early termination of the loan contract.