Mortgage Protection Do we need it???

[fuzz]

HI

We are releasing equity in our house to invest in property abroad by increasing the mortgage on our house from €8k to €370K. Home valued at €800k.
Do we have to have mortgage protection insurance if the bank have the house as collateral and the value of the mortgage is more than covered by the value of the house. MPI would cost approx €1085 with LABrokers
Many thanks in advance

 

[woods]

You should look on it from your point of view and not the bank's.
Would it make a difference to your position if one of you was not here or are you financially secure enough for it not to matter. If you are secure then do not pay it. They can not force you.

 

[fuzz]

Hi Woods

Thank you for that,
Where i was coming from is i thought "Mortgage protection" was mandatory as opposed to "Mortgage repayment protection" which is not?
While not exactly secure as such the thought of paying €1000+ does not appeal to us on top of everything else

 

[woods]

Hi Woods

Thank you for that,
Where i was coming from is i thought "Mortgage protection" was mandatory as opposed to "Mortgage repayment protection" which is not?
While not exactly secure as such the thought of paying €1000+ does not appeal to us on top of everything else

I read on another thread here that it may be mandatory for your PPR but not for an investment or 2nd house.

 

[Sarah W]

You are obliged to effect mortgage protection (life cover) to cover a mortgage on your main residence under the 1996 Consumer Credit Act unless;

1. You are aged over 50
2. You are declined life cover for medical reasons
3. You are offered life cover but at a premium "significantly" higher than standard rates.

So, unless any of the above apply, the answer is yes.

Sarah

www.rea.ie

 

[Newbie!]

Sarah,

So is mortgage protection the same as life assurance or do you need both? Lots of threads on best value etc. but who generally does the best house cover and mortgage protection as a package?

 

[Paz amor]

Sarah,

So is mortgage protection the same as life assurance or do you need both? Lots of threads on best value etc. but who generally does the best house cover and mortgage protection as a package?

Mortgage protection is a form of life insurance. Lenders usually try to sell you "level term" insurance becuase they get more comission - it covers the amount you owe on you rmortgage plus an additional amount you earned an the investment. But most people only need cheaper "decreasing term" insurance (which just covers the amount you owe on your mortgage if you die).

 

[Paz amor]

Hi Woods

Thank you for that,
Where i was coming from is i thought "Mortgage protection" was mandatory as opposed to "Mortgage repayment protection" which is not?
While not exactly secure as such the thought of paying €1000+ does not appeal to us on top of everything else

Mortgage protection is mandatory whereas payment protection is not (covers you if you have accident, ill or made redundant).
According to the Financial Regulator's mortgages guide made easy - you can use an exisiting life insurance policy instead (so long as it's not being used for a specific mortgage already) www.itsyourmoney.ie .. or they have a helpline (1890 77 77 77)

 

[Sarah W]

Sarah,

So is mortgage protection the same as life assurance or do you need both? Lots of threads on best value etc. but who generally does the best house cover and mortgage protection as a package?

No insurer offers a package on life cover and house cover - they are two seperate types of insurance and should be sourced independently; both are mandatory when you get a mortgage.

Yes, mortgage protection is a specific type of life insurance whereby the amount of cover declines in line with the outstanding mortgage balance.

Sarah

www.rea.ie