If you cant pay your mortgage

Protecting what matters to you

Every year over one million people are unable to work due to a serious illness or injury, according to the Association of British Insurers.

Whilst you might think “it won’t happen to me”, if you’re taking out a mortgage, it’s important to consider whether you could afford your monthly bills if you weren’t able to work due to ill health. If you think you’d struggle, then it could be worth taking out a protection policy.

Types of protection policies

There are a few types of protection products, all of which do different things, but the most common policy types are:

Income Protection Insurance

These policies are more specific and generally cover a regular payment that you’d need to make i.e. your mortgage. They can usually be claimed if you’re not able to work due to an accident or illness.

Critical Illness Cover

This is a slightly different type of product, designed to pay a tax-free lump sum if you’re diagnosed with a serious illness covered under your policy. You could use the lump sum to either service the payments on your mortgage, or pay it off completely, depending on the amount you receive in the event of a claim.

protecting what matters to you

If you can’t pay your mortgage

It’s important to consider how you’d pay your mortgage in the event that you couldn’t work, because if you were to fall behind with your mortgage payments your credit rating would be severely impaired.

If your credit rating is impaired, it could mean that you would find it difficult to get accepted for credit or find challenges when applying for a mortgage in the future. In the worst case scenario, if you were to fall into arrears with your mortgage and weren’t able to come to an arrangement with your lender about how to repay what you owe, then you could find that your property is repossessed. If that were to happen, not only would you then lose your home, but you’d also lose also any capital you have in the property.

How much do protection policies cost?

The cost of protection policies will vary depending on your age, your occupation, and your health profile, as well as the level of cover you’re looking to put in place. Our professional mortgage and protection advisers can advise you on all types of policies and ensure you get the right coverage in place.

Request an appointment in-branch today.