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Compare mortgage protection insurance

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CORONAVIRUS UPDATE

Due to the coronavirus outbreak, we are currently unable to offer comparison for Unemployment cover as some of our insurance providers are unable to provide cover. However, we are still able to offer comparison for Accident and Sickness cover.

What is mortgage protection insurance?

Mortgage payment protection insurance (MPPI) covers the cost of your mortgage each month should you lose your job or become unwell. Many policies will pay out for a maximum of a year.

Why might I need mortgage insurance?

Mortgage repayments are one of the largest bills people face, taking around 18% of combined household income each month, or 24% if you live in London. With that in mind, it's important to think about how you'd continue to pay your mortgage if you or your partner lost your source of income.
 
If it would be difficult, or if you're self-employed and therefore not eligible for sickness or redundancy pay, then mortgage protection insurance, also called mortgage payment protection insurance, might be for you.

How does mortgage protection insurance work?

If you're unable to work, mortgage payment protection insurance, or MPPI, could pay you a certain amount each month. This can be enough to cover your mortgage or you can choose a policy that will pay out 125% of your mortgage costs to cover other bills too. The pay-outs can last for up to two years, although some policies offer cover for six or 12 months.

What does mortgage protection cover?

Mortgage protection insurance can cover you for the following:

  • accident and sickness
  • unemployment
  • accident, sickness and unemployment  

The pay-out amount depends on the type of mortgage protection cover you choose, and the best cover type for you depends on your personal situation.
 
Please note, that due to the coronavirus outbreak, you can’t currently compare unemployment cover with us.

Alternatives to mortgage protection insurance

If you’re looking for insurance to cover you for health reasons, or you need longer-term protection, mortgage protection insurance might not be the best option. Here are some alternatives.

  • Income protection
    This is a long-term insurance policy that will provide you with regular income while you’re unable to work due to illness or injury.
  • Life insurance
    Will pay out if you die during the term of the policy. The amount depends on your level of cover and you can choose a lump sum or regular payments. You can even specify how the money needs to be spent – for example, on mortgage payments.
  • Critical illness insurance
    This type of insurance covers specific health conditions, such as a stroke, some types of cancer and heart attacks. You’ll receive one lump sum if you suffer from one of the critical illnesses covered.

Frequently asked questions

Can I claim on my mortgage protection insurance straight away?

No. There’ll be an exclusion period before which you can't claim on your insurance. These periods are longer with mortgage insurance that covers you for unemployment – this is to stop people taking out insurance when they know they're going to be made redundant.
 
Plus, there’ll be an agreed waiting period, between the time you became unable to work and the time your pay-outs start. This is sometimes called a deferred period, and will usually last between one and six months. You might want to choose a deferred period based on when your sick pay from your employer ends.
 
You can choose cover that will pay back the payments you made during the deferred period. This is called 'back to day one' cover, but it is expensive.

Does everyone with a mortgage need mortgage protection insurance?

Not necessarily. If you know you’re likely to get a large redundancy pay-out, or if your employer’s sick pay is very generous, you may not need it. You might also be covered under your health insurance policy, if you have one, so check first.  
 
You also may not need mortgage cover if you’re eligible for government benefits that will help you pay your mortgage – but be aware that these Support for Mortgage Interest (SMI) benefits only pay the interest on your mortgage and, depending on your circumstances, there can be a delay of 39 weeks before the first payment is made. They’re also a loan that you’ll need to pay back when you sell your home.

How can I compare mortgage protection insurance?

It’s easy with our comparison service. Just fill in a few details about yourself and the type of cover you’re interested in:

  • accident and sickness
  • unemployment
  • accident, sickness and unemployment

Please note, that due to the coronavirus outbreak, you can’t currently compare unemployment cover with us.

You’ll then see a page listing your quotes in price order, with the cheapest at the top. There are also different tabs you can select to see the different kinds of cover and how much they would cost.

What’s the difference between life insurance and mortgage protection?

Mortgage protection insurance is, basically, a specific type of life insurance. They both pay out to look after your family when you die, but with mortgage protection insurance, the money is designated for mortgage payments, while life insurance doesn't have any restrictions. Some life insurance policies have a mortgage protection add-on.

Is mortgage protection insurance the same as payment protection insurance (PPI)?

Mortgage protection and payment protection are both types of insurance that cover a single specific debt, but that’s where the similarities end.
 
Mortgage protection insurance is specific to your mortgage and pay-outs will be paid directly to you. PPI covers unsecured finance and pay-outs are paid to the lender, rather than you.

Will being a smoker affect my mortgage protection quote?

If you’re a smoker or vaper, you will be targeted with higher premiums. This is because you’re deemed a higher risk – ie, more likely to fall ill and make a claim.
 
See how much smoking can cost you in terms of life insurance.

Can I get income protection if I’m self-employed?

Yes – and because you don’t have the same rights in terms of sick pay as PAYE employees, it may be more important that you have the right cover in place. Income protection would help you keep up with your mortgage, monthly bills and other outgoings. Long-term cover is also available.
 
Find out why self-employed income protection matters.

Can I cover 100% of my income?

Income protection will usually cover 50-60% of your income, so you can still pay for rent or mortgage payments, your bills and employees’ salaries. The pay-out is just to ensure you keep your home and don’t have to worry about utilities or bankruptcy, so additional costs will need to be self-funded by savings. 

Can I talk to someone about MPPI?

Yes. Our friendly advisers at Assured Futures are just at the end of the phone. Call Freephone 0808 141 1332.

How can I lower the cost of my mortgage protection insurance?

There are a few things you can do to reduce the amount you pay for mortgage protection insurance.
 
Check your employer’s sick pay
If you’re unable to work due to serious illness or injury, your employer may have a company scheme that entitles you to more than the statutory sick pay. This may cover your mortgage payments for a short period. You can then have a longer deferred period (the time between making the claim and receiving the pay-out), which may reduce your premium.
 
Factor in your savings 
If you have a substantial amount saved up, you might be able to cover your mortgage payments for a while. The less likely you are to claim, the lower your mortgage protection insurance will be.
 
If you have health insurance, you may have extended cover for mortgage protection
It’s worth checking what you’re covered for before taking out any other insurance policies.
 
Compare quotes to find the best deal for you
The amount you’ll need to pay depends on various factors, so make sure you compare different providers and different types of cover. We’ll get you a quote within minutes.

What do I need to get a quote?

You won’t need any specific documents to get a mortgage protection insurance quote, but we will need:

  • your basic details
  • annual income
  • monthly mortgage payments
  • employment details
  • marital status.
Start a quote

What our expert says

“You never know what life is going to throw at you, so mortgage protection insurance can be a great safety net should you find yourself in a difficult situation. Make sure you find the right type of insurance for you, and avoid having lots of policies that may overlap.”

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