Mortgage insurance in UK

Mortgage insurance in UK is intended to protect the lender from any claim against the borrower. It protects the bank from third party claims following an event of default on terms or conditions of your loan, such as a delay in paying off the finance charges for overdue payments by way of interest and repayment schedule.

The UK is a relatively safe place to live, unless you’re planning on moving there or there’s an earthquake. However, if you want to live in the UK and invest in property, it is all too possible that one day your dreams will be dashed.

What it covers?

Mortgage insurance works by covering a portion of your mortgage if you are unable to pay it back. This can be done either through a home insurer or through your lender themselves. The amount you pay for mortgage insurance will depend on your circumstances and affordability criteria, as well as how much you owe on your home loan.

Benefits of Mortgage insurance in UK

Mortgage insurance protects your lender against loss of capital in the event that you fail to make scheduled payments or default on your loan. It also provides a safety net for lenders if interest rates rise above original projections, which can lead to higher than expected losses for them.

Types of Mortgage insurance in UK

There are two types of mortgage insurance available in the UK:

UK Mortgage Protection Insurance (MP3) – UK MP3 protects borrowers against loss due to illness or unemployment up to a maximum amount of £40,000 per policyholder per policy year.

Global MP3 – Global MP3 protects borrowers against loss due to illness or unemployment worldwide up to a maximum amount of £50,000 per policyholder per policy year.

Mortgage insurance protects your lender against loss of capital in the event that you fail to make scheduled payments or default on your loan