Mortgage Insurance Cover

If you were unexpectedly made redundant, injured or diagnosed with an illness that kept you off work for months, would you be able to rely on your savings to meet your monthly mortgage repayments? No? You should see whether mortgage insurance cover is suitable for you.

Most homeowners with a full time working partner or savings totalling over £8,000 will not receive any state mortgage assistance in the event of unexpected income loss. But even those who are eligible for mortgage support will often face interest payments of up to £100,000, unless they have mortgage insurance cover in place to come to the rescue.

Mortgage insurance payment protection

If you work in the UK, you can take out Mortgage Payment Protection Insurance (MPPI) to protect you against the consequences of involuntarily losing your income. Simple mortgage insurance cover differs from mortgage life insurance, which insures your mortgage in the event of your death.

What does mortgage insurance cover?

Mortgage insurance can be used to cover your mortgage outgoings during enforced unemployment, and is not designed to insure your mortgage repayments over the entire course of your mortgage. Most mortgage insurance polices last for a maximum of one year, but a minority of insurance polices will pay out for two years. Mortgage insurance can cover capital and interest mortgage repayments, as well as other mortgage-related outgoings such as premiums for endowment policies.

However, mortgage insurance will not pay out under various circumstances, including if you're aware that you're going to make a mortgage claim before taking out the mortgage payment protection insurance policy.