Mortgage protection Insurance

  • Thread starter diceyreilly
  • Start date
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diceyreilly

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i have a tracker mortgage with 1st active secured on 2 residential investment properties. LTV is approx 50%.At the time of taking out I was sold a mortgage protection from Friends 1st.Do i need this cover or can i cancel as it costs €50 per month.Any pros & cons to this cancellation. Thanks in advance.
 
I would check with your lender as it is likely they will insist you have mortgage protection. Then look at labrokers for a better deal.

gb---
 
As the protection is covering investment properties, it is unlikely that your lender insists that this cover remains in place.
 
Mortgage Protection is only a legal requirement covering a mortgage on a family home.

As these are investment properties, your bank "should allow" you to cancel.

Your options here really depend on what you have in mind for these investments i.e retain for rental income or sell in 2/3 yrs time if/when they have accumultated in value.

The advantage of cancelling your policies are, you will be saving €50 pm. The disadvantage of this is that, in the event of death, the properties will have to be sold to repay the outstanding mortgage. (Unless you have alternative life cover in place).

Bearing in mind the costs of putting the investment in place (stamp duty, legal fees, fit out, etc) - costs which you never really get any value in return when selling, it might be as well to keep the protection in place....Again depends on your intentions.

Its also an option to reduce the level of cover instead of completely cancelling both policies.

One exercise is to add up your total outstanding loan balances (mortgages, car, etc) and then add up all of your protection products (life cover, serious illness, income protection, etc) and evaluate where you or your family would be if the worst were to happen.

Hope this info helps.

Best wishes,
Sean
 
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