Mortgage Protection: How to Keep Your Home if the Worst Happens

For most families, the mortgage is the single biggest financial commitment they’ll ever make. Mortgage protection is simply insurance designed to make sure that commitment doesn’t fall on your family if you die, or on you if you can’t work. It isn’t one product — it’s a goal you can reach a few different ways.

The three building blocks

• Life insurance — clears the mortgage if you die. Often “decreasing term”, where the cover falls in line with your outstanding balance, which keeps it cheap.
• Critical illness cover — pays a lump sum if you’re seriously ill, which can be used to clear or reduce the mortgage.
• Income protection — keeps the monthly payments going if illness or injury stops you working.

Many people combine two or three of these so the mortgage is protected against death, serious illness and loss of income alike.

What about the policy the lender offers?

When you take out a mortgage, the lender or broker will often offer a protection policy on the spot. It might be fine — but it’s rarely the best value, and it’s rarely tailored. You’re under no obligation to take it, and comparing the whole market usually finds better cover for less.

Getting the structure right

The art is matching the cover to your mortgage: the right amount, the right term (usually the length of the mortgage), and the right mix of life, illness and income cover. That’s exactly the sort of thing that benefits from a five-minute conversation rather than a tick-box at the lender’s desk.

Protecting the mortgage is really about protecting the home — and the people living in it.

We compare mortgage protection across the whole market and help you build the right combination of cover around your loan. Free, impartial and no obligation.