Pension reform: Why the bill will impact the mortgages of some borrowers

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Pension reform could have a significant impact for some borrowers. Insurers will undoubtedly have to raise their rates.

The pension reform – which will soon be discussed in a joint committee – could have a significant impact on mortgages, and in particular on insurance, taken out by some borrowers. At issue, inevitably: the postponement of the legal retirement age to 64 years. If the government’s bill is passed within days, insurers would then be required to raise their rates.

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Of this “perverse effect” of the reform, it is above all the borrowers over 40 who risk paying the price. Overall, due to the postponement of the statutory retirement age, borrowers will have to work another two years. Private insurers will have to take this measure into account and for good reason: borrowers could indeed find themselves in temporary or total incapacity for work for a longer period, explain our colleagues at Capital. In any case, these are risks covered by the insurer, such as the death or total and irreversible loss of autonomy of the person concerned.

The private insurers concerned

The online comparator states that the prices of the borrower’s insurance could increase by 2 to 5%. In practice, private insurers will have to set the amount of the contributions themselves. Banks offering their own insurance on their side could absorb this price increase.

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The site offers an example. In the event that a 40-year-old man who lives alone borrows 200,000 euros over 25 years, the most advantageous quotation that could be offered to him could reach 8,627 euros (or 29 euros per month for the borrower). If rates go up by 5%, the borrower will have to pay an extra 1.45 euros a month.

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