Mortgage basics
Can the bank require you to domiciliary your income with it?
No text obliges you to domiciliary your income for a mortgage. Quantify the requested consideration and negotiate it before the loan offer.
No: no text obliges a borrower to domiciliary their income with the lender, and none prohibits the bank from requesting it. It is a commercial condition, negotiable like the interest rate. When it conditions the loan, the loan offer must state it and assess its cost. It is negotiated before the issuance of the loan offer, by comparing the cost of the linked products to the gain obtained from the interest rate differential granted.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- No text obliges you to domiciliary your income for a mortgage: it is a negotiable commercial condition, not a legal obligation.
- The former framework governing domiciliation has disappeared from the code: the practice is not prohibited; it now falls under the general law of contracts.
- When a consideration conditions the loan, the loan offer must assess its cost: this is the best lever for negotiating the file.
- A banking package is quantified by comparing the genuinely new products to the interest rate differential granted, over the requested commitment period.
- The consideration is negotiated before the issuance of the loan offer: once issued, the deadline serves to read the document, not to renegotiate it.
No: no text obliges a borrower to domiciliary their income with the bank that lends to them. It is a commercial condition, negotiable like the interest rate, before the loan offer. One of the fundamentals of a mortgage.
Domiciliation of income: what the law says today
Nothing. Article L. 313-25 of the Consumer Code lists nine mentions of the loan offer; none refers to domiciliation. Its current version carries the amendment “Act No. 2019-486 of 22 May 2019 — Art. 206”.
The former provision has left the Code. The practice remains permitted: what is written applies, the rest does not exist.
Require it in writing and quantified in the offer
The offer must state the conditions that condition the loan, giving an assessment of their cost. A domiciliation requirement is part of this.
This is your lever. And domiciliation rarely comes alone: account, card, home insurance, savings.
Quantify the package in three steps
Compare, over the commitment period: the cost of the products you would not have taken, and the gain from the interest rate discount. If the former prevails, the discount costs you.
- Isolate the products that are truly new.
- Translate the discount into euros, to be read with the APR.
- Compare over the commitment period, not over the loan term.
Ils y entrent, débours réels compris. En revanche, une cotisation de carte bancaire ou une prime d'assurance habitation souscrite « pour la relation » n'entre pas dans le TAEG : comparer deux offres sur le seul TAEG laisse donc ces charges hors du champ.
- En vigueur depuis le
- Source
- Article R. 314-4 du code de la consommation — Légifrance
Two offers at the same APR can therefore cost differently. Vocabulary: reading displayed rates.
| What the bank asks for | What is legally required | What is negotiable |
|---|---|---|
| Domiciliation of income | Nothing: no text imposes it on the borrower | Its principle, its duration, and the consideration obtained in exchange |
| Opening of a current account | Nothing, apart from the technical necessity of direct debit for instalments | Account maintenance fees, card range |
| Lender’s borrower insurance | Nothing: the choice of insurer belongs to the borrower | The proportion, the guarantees, and the change during the loan |
| Savings to open or transfer | Nothing | The amount, the very existence of the line |
| Home insurance, life insurance | Nothing | The maintenance of your current contract |
Identifying the clause: reading a loan offer.
Changing bank after the loan
It all depends on the contract: a clause may stipulate the loss of the advantage, often a rate increase. Without a written clause, there is no automatic lever.
Bank mobility (Article L. 312-1-7 of the Monetary and Financial Code) moves your cash flows, not your commitments. Re-read the clause, duration and sanction. See also renegotiate or redeem and the online bank.
Negotiate before the issuance of the offer
Never after: the cooling-off period is for reading, and any modification requires a new offer.
- Délai de réflexion de l'emprunteur 10 jours
- Maintien minimal des conditions de l'offre 30 jours
Le maintien des conditions protège l'emprunteur d'un changement de taux ; il n'ouvre aucune fenêtre de négociation. Toute modification, y compris sur les contreparties, suppose l'émission d'une nouvelle offre et fait repartir le délai.
- En vigueur depuis le
- Source
- Article L. 313-34 du code de la consommation — Légifrance
- Discuss the counterparty during the processing.
- Have them written in the special conditions.
- Check the offer received before accepting it.
Several banks at the same time: the counterparty becomes quantifiable
Toute publicité et tout document destinés aux emprunteurs doivent indiquer de manière apparente l’étendue des pouvoirs de l’intermédiaire, notamment s’il travaille à titre exclusif avec un ou plusieurs prêteurs ou en qualité de courtier indépendant
Cette indication est due dans toute publicité et tout document destinés aux emprunteurs. Elle répond à la question qui commande la valeur d'une mise en concurrence : combien d'établissements peuvent réellement être sollicités, et lesquels.
- En vigueur depuis le
- Source
- Article L. 322-3 du code de la consommation — Légifrance
Presented at the same time to several institutions, the file makes the counterparties comparable: intermediary or direct bank. Insurance has its own regime: the Lemoine law. Intermediary fees: what they cost.
Refusing, with a competing offer in hand
You may refuse; the lender may then refuse the loan or revise its terms. Prepare this refusal with another offer in hand.
Ask: what happens to the interest rate without domiciliation, and what do the associated products cost each year? Have this consideration quantified by telephone.
Create your file: the interest rate and the considerations are discussed together.
Sources
Read next
- Mortgage in Lyon: frequently asked questions
- Mortgage intermediary or direct bank: an honest comparison, and the five cases where I advise against using an intermediary Intermediary or direct bank: what each brings, what neither can promise, and the five cases where going to your bank alone is sufficient.
- Reading a mortgage rate: nominal, APR, usury threshold, and the gap between Lyon and the regions Nominal rate, APR, TAEA, average effective rate, usury threshold: what each figure covers, where to read the official reports, why yours will differ.
- Intermediary fees: how much, who pays, and when Free pricing, bank commission, nothing to pay before the funds are disbursed, impact on the APRC: what a mortgage intermediary really costs, and when.
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