Mortgage Insurance Calculator
Written by Thierno Sadou Diallo, formula verified per our methodology • Last checked on 9/5/2026
Borrower insurance cost is calculated with borrowed capital × annual insurance rate. For a €200,000 loan insured at 0.35% per year over 20 years, count €700 per year, or about €58 per month and €14,000 over the full term of the loan.
Explanation
Borrower insurance guarantees repayment of the loan to the bank in the event of the borrower's death, disability, or incapacity to work; it is almost always required to obtain a home loan, but its cost isn't included in the loan's own interest rate — which is why it needs to be calculated separately. This calculator applies the rate to a constant "initial capital" over the full term, the most common formula used by French banks (notably the bank's own group insurance): the insured amount doesn't decrease as repayments are made, unlike a rarer "outstanding balance" contract, which follows the borrowed capital down and so gradually costs less, but remains a minority of the market. The annual rate (in France, called the TAEA, the insurance's effective annual rate) varies a great deal with the borrower's age, health, and occupation: a young borrower with no particular health risk can get a rate under 0.15%, while an older or higher-risk borrower can exceed 1%. Under French law (the 2022 Loi Lemoine), it's possible to switch insurer at any time with no fees or penalty, which often meaningfully reduces this cost compared to the bank's initial offer — though this calculator never replaces a personalized quote. This insurance cost adds to other line items to plan for in a home-buying budget, like the interest itself — see our compound interest calculator for how loan interest compounds over time, or our Rule of 72 calculator for a quick mental-math estimate of how fast a sum grows or a debt compounds at a given rate.
Example: a €200,000 loan over 20 years, 0.35% rate
Inputs
Borrowed capital: €200,000. Annual insurance rate: 0.35%. Term: 20 years.
Calculation
Annual cost = €200,000 × 0.35% = €700. Monthly cost = 700 ÷ 12 ≈ €58.33. Total cost = €700 × 20 = €14,000.
Result
This loan's insurance costs €700 per year, or about €58.33 per month and €14,000 over the full term of the loan.
Frequently asked questions
Why does the insurance rate vary so much from person to person?
Because it reflects an individual statistical risk: age, health, occupation, and sometimes sporting activities or smoking affect the likelihood of needing to trigger a guarantee (death, disability, incapacity). Observed rates commonly range from 0.15% for a young, healthy borrower to over 1% for a higher-risk profile.
Can I switch borrower insurance after signing the loan?
Yes, under the 2022 Loi Lemoine, it's possible to cancel and switch borrower insurance at any time, with no fees or justification needed, as long as the new contract offers guarantees at least equivalent to what the bank requires. This is often the simplest way to reduce this cost after signing.
Why might the result differ from my bank's quote?
This estimate applies the rate to a constant initial capital over the full term, which matches the most common type of contract. If your offer uses an outstanding-balance contract (insurance decreases with the capital repaid), the real total cost will be lower than what's calculated here, which in that case remains an upper-bound estimate.