How to change banks when you have a mortgage

Do you want to look elsewhere but feel tied down by your mortgage? Don't panic, you have the right to be unfaithful to your bank. Since the 2019 Pacte law, the issue of income domiciliation has been part of commercial negotiations. In fact, the bank requires it almost always—it is free to choose whether or not to grant a loan—but it must include it in the contract and mention the compensation: a preferential rate, free future renegotiation fees, etc.

In practice, if you want to change banks without having your loan repaid (the rates charged today are high compared to those of a few years ago), you may be in two situations.

If there's no direct debit clause in the contract, you can switch banks. All you have to do is ask the lending institution to debit your monthly payments from your new current account. The same applies if there is one, but without explicit compensation: the clause is then considered "abusive."

On the other hand, if your loan offer includes a direct debit clause with a clear counterparty, you theoretically cannot change banks. But nothing prevents you from having a secondary bank that will be exactly like your primary bank. The lending institution requires that your salaries, retirement pensions, or social benefits land in an account opened with it. But, since you are free to use your money as you wish, you simply need to set up a monthly standing order to the secondary bank, and leave only the amount of the monthly loan payment in this account.

To avoid paying unnecessary bank fees, ask your original bank to remove payment methods, bundled service offers, etc. You may still be charged a few euros each month in account maintenance fees. A legal sleight of hand, but if you do this, your honeymoon with your banker will be well and truly over.