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Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
14.05.2025
Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
14.05.2025
Mortgage Protection Insurance
Could you afford your mortgage repayments if you were injured and couldn’t work, or lost your job through no fault of your own?
If life throws an unexpected hurdle in your way, it’s good to know you have a back-up plan in place. This is what mortgage protection cover can do for you and your family. It ensures that no matter what happens, the mortgage will be paid and your family home safeguarded. There’s just no putting a price on that kind of peace of mind.
At Ascot Mortgages, we understand the importance of protecting your investment to ensure the security of your home. We are experienced mortgage and protection advisors in the UK, dedicated to helping our clients find the right mortgage protection insurance to suit their needs. With our expertise, we can guide you through the options available and help you make an informed decision.
Get in touch with Ascot Mortgages to arrange your free consultation.
What is Mortgage Protection Insurance?
Mortgage protection insurance provides cover for your monthly mortgage repayments if you get seriously ill or injured and are unable to work. It can also be claimed if you lose your job through no fault of your own, such as being made redundant.
Once you make a successful claim, your insurer will pay out a set amount each month. This will cover your mortgage payments and ensure the family home is protected.
Do I Need Mortgage Protection Insurance?
For most people, mortgage payments are one of the largest household expenses going out each month. They’re also the most important, as failure to keep up with repayments could potentially lead to your home being repossessed.
This is why mortgage insurance policies are so popular, as they offer a crucial safety net against this worst-case scenario. If you’re unable to work due to illness, injury or redundancy, your policy will cover mortgage payments while you recover. This can ease any stress or worries over making repayments, so you can focus on getting better and getting back to work.
If you don’t have any other kind of financial support in place (such as savings, for example) mortgage protection insurance could be a sensible policy to take out. It’s also a good option if you’re self-employed and don’t have access to employer benefits such as sick pay or redundancy pay.
How Does Mortgage Protection Cover Work?
Mortgage insurance provides a pay-out if you’re unable to work, only under the conditions set out by your policy (i.e. serious illness, injury or redundancy).
You can set how much cover you need when taking out the policy. Most people take out just enough to cover monthly mortgage payments, but it may also be possible to take out extra to cover other essential bills. You’ll either receive around 65% to 75% of your gross monthly income, or a capped limit of £1,500 to £2,000 per month.
If you make a successful claim, you’ll need to wait to receive the money. This is known as the ‘deferred period’, and it’s usually around 30 to 180 days.
What Does A Mortgage Protection Policy Cover?
Mortgage insurance usually covers:
- Serious illness or injury caused by an accident, which leaves you unable to work
- Unemployment through no fault of your own, such as redundancy.
Some policies cover one or the other, while others offer comprehensive cover for all scenarios.
What Doesn't It Cover?
There are some exclusions in mortgage protection policies. They won’t usually cover:
- Voluntary redundancy, getting sacked or leaving your job voluntarily
- Refusal to accept an alternative role with your current employer, or prior knowledge of redundancy
- Pre-existing and chronic medical conditions
- Pregnancy and childbirth (unless in the case of medical complications)
- Self-inflicted injuries or illnesses
- Elective surgeries or treatments
- Inability to work due to alcohol or drug abuse.
Pros and Cons of Mortgage Insurance
It’s important to weigh up the advantages and potential drawbacks of mortgage protection cover before taking out a policy – to make sure it’s the right choice for you.
Here are some pros and cons to consider.
Pros:
- Crucial peace of mind that mortgage payments are covered if you can’t work
- Suitable for self-employed people
- Safeguard the family home
- You can focus on recovery, knowing that essential bills are taken care of.
Cons:
- You’ll usually have to wait until you start receiving payouts
- You may not be accepted if you have a pre-existing or chronic medical condition
Alternatives To Mortgage Insurance
Mortgage protection insurance isn’t the only type of personal protection policy available. There are a number of other types of cover which could suit your needs better.
These include:
How Much Does Mortgage Protection Cover Cost?
The cost of mortgage insurance will vary between providers, so it’s important to get a few quotes. This is something Ascot Mortgages will be happy to help you with – contact us to get started.
But there are also other factors that can affect your premiums, which can range from around £10 to £40 a month. These include:
- Your age and state of health
- Your job – some roles or industries are seen as riskier than others by insurers
- The level of cover you need – whether it’s just for your mortgage payments or for other bills too
- The deferred period you choose – it may be possible to opt for a shorter waiting period, but this can push up the cost of your premiums
- How long you need the cover to last.
How Can I Lower My Insurance Costs?
To make your mortgage protection policy a little cheaper, it’s recommended to lower your level of cover and/or deferred period. This may mean that just your mortgage repayments are covered (or nearly covered – you may be able to use savings for the rest) and that you need to wait longer for a payout. But it should mean that your premiums are lower.
You may also want to look into whether you can access other forms of support, such as sick pay or redundancy pay from your employer. You should also check your life insurance policy, as you may already have critical illness cover which could help you make your mortgage repayments.
Do I Have To Tell My Insurer Anything?
When getting quotes for mortgage protection insurance, it’s very important that you’re completely honest with the insurer. This means you’ll need to disclose things like pre-existing medical conditions or the reason you lost your job (i.e. if you left voluntarily or were sacked).
If you leave anything out or aren’t completely accurate when providing information, it could mean the insurer refuses to pay out – at a time when you really need the money.
Will My Health Affect My Quote?
Certain factors related to your health may affect your quote for mortgage protection cover. For example, you may struggle to get a policy or face higher premiums if you have a pre-existing or chronic medical condition. Smokers are also likely to face higher costs, as they’re considered higher risk by insurers.
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Your Mortgage Protection Cover Questions Answered
You can submit a claim on your policy as soon as you get ill or injured, or are made redundant. However, you’ll need to wait for the ‘deferred period’ on your policy until you’ll start receiving monthly payouts.
No, but it can provide peace of mind by covering your mortgage payments in case of unexpected circumstances.
Life insurance pays out a level lump sum upon death, while mortgage protection decreases with your mortgage payments, so will payout whatever is left on your mortgage.
No, mortgage protection covers your mortgage in the event of death, PPI covers various types of debt.
Yes, as smokers are generally considered higher risk, they will face higher premiums for mortgage protection insurance. Reach out when you’re ready, and we can help you understand your options.
Yes, self-employed individuals can get income protection, providing a regular income if you can’t work due to illness or injury.
Typically, income protection policies cover 50-70% of your pre-tax income. This can vary based on the insurer. We’re here to help you understand your coverage when you’re ready.
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