When you are taking out a mortgage, make sure to take out this free insurance

You buy a home and take out a loan to embark on a new chapter in your life. But what if your income suddenly disappears due to illness or redundancy? Fortunately, there is a little-known but valuable insurance policy. And best of all, it’s completely free.

1. What is free mortgage payment protection insurance?

You can take out this free insurance policy when you take out a mortgage. The insurance protects you, the owner, against loss of income due to unfortunate circumstances, such as redundancy, incapacity for work or forced termination of a self-employed business. You can take out this insurance in Flanders and Wallonia when you are buying or building a home in Flanders and Wallonia, and in Flanders it will also cover your renovation project.

Free mortgage payment protection insurance is not to be confused with a mortgage life insurance policy, which does come at a fee. A mortgage life insurance policy usually covers the repayments of your loan in the event of death (or optionally disability), while mortgage payment protection insurance covers a temporary loss of income due to unemployment or illness.

2. Is mortgage payment protection insurance really free?

Yes. You do not pay a premium for this insurance: the government pays the premiums to the insurer. There are no costs for you as a citizen, not even any administrative fees. All it costs you is the time and effort it takes to submit your application on time (within twelve months – see below). In any other sense, this supplementary insurance is completely free. So don't be misled by the term 'insurance': this is not a commercial policy for which you pay a monthly premium, but a government premium you can benefit from.

3. What are the conditions?

Whether you qualify for the free insurance depends on several criteria concerning your loan, your home and your personal situation. The exact conditions vary from region to region.

> For Flanders:

• You and any co-borrowers must not have any other home in full ownership at the time of the application, unless that other home has been declared uninhabitable or unsuitable. The insured home must be your main residence, either now or in the near future. You have not had any previous mortgage payment protection insurance cover for the same home.
• The property's market value or estimated value must not exceed a certain ceiling. The ceiling for 2025 is around 393,000 euros and is indexed annually. The maximum amount is higher in some municipalities with high house prices (around 452,000 euros). This higher ceiling applies to roughly 180 Flemish municipalities.
• Your mortgage must be at least 50,000 euros (or 25,000 euros for renovations). A loan for a building plot is not eligible, unless it is combined with a construction loan. Refinancing of an existing loan and bridging loans are also excluded.
• You must have been in (part-time) work for at least twelve months (as an employee or self-employed person) and be in work on the day of the application. You may also not have been unemployed for more than ten days during those twelve months. Involuntary leave is seen as equivalent to a worked period.
• You must be fully fit for work at the time of application and you must have been able to work throughout entire previous year (except for normal maternity leave).

In Flanders anyone taking out a mortgage loan with any bank can apply, and the insurance is not limited to social loans. Please refer to the full current list of conditions.

> For Wallonia

In Wallonia, there is a similar scheme known as the Assurance gratuite contre la perte de revenus.

• The insurance is for people who are taking out a mortgage to buy an existing home or to build a new one. You must not own another home. You must not have owned any other property in full in the two years prior to signing the mortgage deed (with the exception of uninhabitable properties).
• To take out the insurance, you must confirm that the property will be your main residence for eight years and you will not sell it on or let (part of) it. If you do meet these conditions, you will lose the right to the insurance (or you will have to repay any benefits you received).
• When signing the credit agreement, each borrower must be working at least half-time under a permanent contract, work in education with at least four years' service, or be self-employed as their main occupation. You must not be in a notice period at work or be on long-term sick leave at that time. If you are taking out a joint loan and one of you meets the conditions and the other does not, the former can take out the insurance. In that case, the cover will apply to the insured borrower.
• If you are building a home and you already had a loan for the plot, the construction loan may suffice to get the insurance. Please refer to the full current list of conditions.

> For Brussels

The Brussels-Capital Region does not currently offer this type of insurance. In 2009, a guaranteed housing insurance policy was approved by the Brussels Parliament, but it was put on hold and never implemented due to budgetary issues.

This does not mean that Brussels residents are completely without options. Insurers offer policies that cover similar risks. However, such commercial policies are not free of charge. They charge premiums, and their conditions may be stricter or their payouts may be more limited.

4. What compensation will you receive and for how long?

In Flanders, the insurance is valid for ten years. The benefit in the event of redundancy or incapacity for work starts after a three-month qualifying period and goes up to 600 euros per month (depending on your taxable income and the home's energy rating). In the event of incapacity for work, you will receive compensation for up to three years, and in the event of redundancy for up to one and a half years.

In Wallonia, the insurance covers the first eight years of the loan. If you were to lose your income due to redundancy or full incapacity for work, the insurance covers you for up to three years. The maximum amount is 9,000 euros per year (750 euros per month).

Compensation is only available if the loss of income is involuntary. This means that if you resign or stop your business on your own initiative, you are not entitled to the benefit. You must be able to prove that the loss of income was beyond your control.

5. How to apply for the insurance

In Flanders, you submit your application to the Flemish Housing Fund online within twelve months of the first drawdown of your loan. You can do this with the online form.

In Wallonia, you submit the application to the Housing Department of the Service Public de Wallonie (SPW). You can download and complete the necessary forms. You need to send it to the department by post within twelve months of signing the credit agreement.

Remember to apply for the insurance well in advance. It costs nothing and can save you a lot of hassle later on.

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