Mortgage Protection - Confused!

[Bubblebunny]

Hi,
I am a little confused about mortgage protection.

I am trying to buy a house (FTB) amd I was factoring in the cost of it into my monthly repayment schedule, along with home insurance, to see how much I would be paying in total, not just for the actual mortgage.

But then my friend said not to bother with a mortgage protection policy as they are very expensive for what you get. That it basically just means that your mortgage will get paid for up to a year if you are out of work due to illness. But that as I am already paying into an Income Continuance Plan at work, that is fully covered.

I had thought that mortgage protection was obligatory. Which is correct?

And what policies/extra charges do I actually need to cost in work out my regular monthly payments/

Thanks for any advice you can give me!

Confused

 

[CCOVICH]

I think you are confused between mortgage protection (which is compulsory in most cases) which pays off the mortgage when you die, and payment protection, which pays out (in limited circumstances) if you are off work and cannot meet repayments.

The former is not that expensive* and will probably be required by your lender. The latter is expensive* and looks like it is not necessary in your case.

*I realise that expensive is a relative term.

See this Key Post for more info.

 

[Bubblebunny]

Excellent..thanks for your help.

This house-buying craic is harder than it looks!