A recent experience inspired me to post this, all of these I believe are typically out of ignorance and not blatant hate or disrespect, but nonetheless, extremely offensive:
-Head case/nut case
-Insane or that they have lost their sanity- or any variation of that
-Mad or madness
-Not all there
-Psychotic (unless it is being used in a way to clinically describe psychotic symptoms or behavior)
When talking about how someone is doing mentally, mental health is the proper terminology- not mental sanity or anything else along those lines.
There is no such thing as a "loony bin" or anything else along those lines. It is a psychiatric hospital and there is no shame in seeking the help you need there.
You get the point! It hurts, it's offensive and it's untrue. Consider the feelings of others before using terminology like that even if there are no ill-intentions.