Mortgage Repayment Protection

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Ashling74

Guest
We are taking out a basic mortgage protection policy. Would it be worthwhile to take out an additional Mortgage Repayment Policy? We don't want to take out Serious Illness Cover. According to websites this would cover illness, redundancy. Your thoughts appreciated.
 
might be worth reading. If you are considering mortgage repayment protection then make sure to pay careful attention to the detailed terms & conditions of the agreement and make sure that you understand precisely in what circumstances the policy will/will not pay out and for how long (individual incident and cumulatively) etc. Policies will differ and some will be more restrictive than others. My personal opinion is that many of these policies offer poor value and that anybody who has enough savings to comfortably cover a few months mortgage repayments might be as well to forego such cover. But, as ever, what might fit my circumstances/needs might not suit others'.
 
Hi,

I was of the understanding that you could not take out a mortgage without taking our mortgage protection policy.
For example I have a friend who is a diabetic and she had terrible problems with the banks trying to obtain her mortgage as they would not give her mortgage protection policy due to her condition. Bear in mind this girl is in very good health and has been in full time employment for a long number of years. Is this not classed as discrimination on the banks behalf. Can anyone tell me what is the situation when taking out a mortgage, do you have to take out mortgage protection policy. Any information would be appreciated.

Thanks
 
I was of the understanding that you could not take out a mortgage without taking our mortgage protection policy.

In general mortgage protection life assurance is mandatory for owner occupiers (there are some exceptions) but this topic is about mortgage repayment protection insurance which is always optional. Don't confuse the two. See for more on the differences between these policy types.

The Consumer Credit Act allows for the normally mandatory requirement for owner occupier mortgage protection life assurance to be waived and [broken link removed] may apply to your friend.
 
So am I right in thinking that when I move out of my PPR later this year and let it out that I can cease my mortgage protection policy? (I bet I'm wrong!)
 
If your PPR will become an investment property then there is no reason why you should be forced to retain the mortgage protection life assurance policy. However some lenders may insist on retaining this even though the mandatory requirement (in most cases) for this outlined cover in the Consumer Credit Act only applies to owner occupiers. In any case there may be good reason to keep it depending on your own personal circumstances (e.g. if you die your next of kin can inherit the investment property without, perhaps, being forced to sell it to discharge the outstanding mortgage). Don't forget that if you convert your PPR into an investment property then you will most likely have to inform your lender anyway under the terms and conditions set out in your owner occupier mortgage agreement. In addition you will probably also need to put in place home/contents insurance cover other than an owner occupier policy.
 
repayment protector

I've just cancelled a policy which claimed to be covering us in the event of disability/redundancy. I feel like such a fool that we were paying €33 a month for the last 10 months for this (it was separate from our life assurance policy)
I read the fine print last week (having been paying into the policy for the best part of a year) and discovered that, in the event of my partner or myself being out of work through redundancy or disability (being sacked or resigning doesn't count and both our companies have sick pay schemes), it would pay the huge sum of €50 a month off our mortgage. We decided that in the event of one of us being without an income, the other would manage to come up with €50 from somewhere so scrapped the policy. Then I read down and saw that it wouldn't even pay €50, it would pay it pro-rata to our individual earnings. We have combined earnings of €50k pa (me 18k, him 32k) so if I was made redundant it would pay out the grand sum of €18 a month
 
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