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Mortgage Protection

When you get a mortgage to buy your home, you will generally be required to take out mortgage protection insurance. This is a particular type of life assurance taken out for the term of the mortgage and designed to pay it off on the death of the borrower or joint borrower.
In most cases, the lender is legally required to make sure that you have mortgage protection insurance before giving you a mortgage, with some exceptions – see ‘Exceptions to legal requirement’ below. However, if the lender offers a particular policy, you are not required to buy it. You can shop around for a mortgage protection policy that suits your needs. Your lender cannot refuse you a mortgage because you don’t buy the policy it offers.
Mortgage protection should be payable on a joint life, first death basis. This means that the mortgage is repaid on the death of the first borrower if a couple is involved.
It is important to review your mortgage protection policy regularly and ensure that you take out additional cover, if necessary, to cover extensions of the mortgage term or any penalties incurred. You must keep the premiums up to date. If you go into arrears, the policy may lapse.
The National Consumer Agency publishes detailed information on mortgage protection insurance.
Exceptions to legal requirement
You do not have to take out mortgage protection insurance if:

  • You are aged over 50 or
  • The mortgage is not on your principal private residence (your home) or
  • You cannot get the insurance, or can only get it at a much higher premium than normal or
  • You already have enough life insurance to pay off the home loan if you die

However, some lenders may insist on it as a condition of giving you a mortgage.  Therefore it can be very important to make sure you have the right type of protection for you.  We specialise in providing mortgage protection at the right rates for our customers so please call into us and we can go through the best options for you!