Mortgage payment protection insurance

Shop around for mortgage payment protection insurance deals

While about 60 per cent of new mortgage borrowers take out MPPI, only one-third of all borrowers have this insurance. This may simply be because the cover is not particularly cheap - many lenders charge around £5 per £100 of mortgage payment you wish to insure each month. But note that you may be able to find cheaper MPPI if you shop around. And some mortgage deals come with free MPPI, either for six months or a year. Note that if you remortgage at any point and increase the size of your mortgage, you will also need to increase the level of MPPI cover.

You can take out mortgage payment protection insurance direct over the internet, but some financial advisers claim they can offer this insurance more cheaply because of their bulk-buying arrangements.

Some mortgage deals come with free MPPI for the first six months or the first year, but you must remember to renew the policy or take out another one at the end of the free period.

State help with your mortgage payments

Under Department of Social Security rules, homeowners who bought their property after 1st October 1995 have to wait nine months before they receive help with their mortgage interest payments from the State. And, even then, they must be in receipt of Income Support or the Job Seeker's Allowance, and their savings must not exceed £8,000. And benefits only cover interest on the first £100,000 of the loan.

Borrowers who took out their mortgages after 1995 will receive no State help at all.

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