Zero-rate loan: what mortgage credit insurance?
Extended until the end of the year, the Zero Rate Loan (PTZ) is a complementary credit to your main loan. Indeed, it finances up to 40% of the real estate transaction. This subsidized loan is granted according to the household’s income (year N-2), its composition and the location of the property (new or old with work).
The rate of this loan is 0%, that is, the borrower will not reimburse interest to the bank. However, the PTZ, like the main mortgage, must be insured. In fact, in the event of illness, accident or death, the loaned funds must be repaid. Home loan insurance protects the borrower in this eventuality.
What guarantees for the insurance of the loan at zero rate?
The borrower insurance insures the risks of death, total and irreversible loss of autonomy (PTIA), disability and incapacity to work. The job loss guarantee is optional. The amount of the contributions varies according to the profile of the borrower and the level of cover subscribed.
PTZ insurance is generally offered with the same guarantees as the main loan. However, the borrower has the option of choosing a home loan insurance other than that offered by the bank. Thus, the overall effective annual rate of the PTZ (TAEG) is not 0% but depends on the insurance rate of the latter.
The Aeras convention to Insure and Borrow with an Aggravated Health Risk
People with a health problem can benefit from the Aeras convention. This facilitates access to mortgage for people suffering or having suffered from an illness. In the event that the insurer cannot offer insurance at a standard rate due to the insured’s medical history, the Aeras agreement may be entered.
Note that in the case of a PTZ, “for borrowers under 35 years of age, the relative insurance premiums are fully covered by banking and insurance professionals since September 1, 2011, subject to conditions resources, ” says the Ministry of Housing and Sustainable Housing.
A new measure regarding the termination of home loan insurance
The Hamon law gives the borrower the freedom to change mortgage insurance the first year of subscription. The only condition is to present a contract with the same guarantees as that of the bank.
An amendment has also just been adopted by Parliament for the annual termination of borrower insurance. Proposed by Senator PS Martial Bourquin, it should enter into force for all credit insurance contracts from 2018.
A new measure deemed “very risky ” by the monitoring and proposals committee of the Aeras convention. ” The consequences of excessive demutualization of borrower insurance will be to the detriment of the social categories of first-time home buyers in terms of income, age or health”.
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