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The Ultimate Guide to Mortgage Protection Insurance in Ireland 2024

guide to mortgage protection ireland

What is Mortgage Protection?

Mortgage protection insurance is a type of life insurance you need to get a mortgage in Ireland.

If you or your partner dies during the term (years) of the mortgage, the mortgage protection policy pays off what you owe the bank.

Basically, it covers the banks arse.

Mortgage protection in plain English

Our Thirteen Top Tips

  1. You DO NOT NEED life insurance to draw down your mortgage; no matter what the bank says, you only need basic mortgage protection.
  2. Dual life mortgage protection cover is better than joint life cover.
  3. If there are two people on the mortgage, you both need insurance for the full value of the mortgage (not 50% each)
  4. If you’re buying as a couple but aren’t married, you should consider two single-life policies to reduce any potential inheritance tax liability.
  5. You don’t have to buy mortgage protection from your bank. Always shop around and buy the policy that offers the best value and benefits.
  6. Buying from a broker won’t slow down your mortgage. A good broker will be quicker than the bank.
  7. If you add serious illness cover to your mortgage protection policy, the bank, not you, will get any payout.
  8. Your premium is fixed for the life of the policy and your policy will roll over from year to year. You don’t need to reapply annually.
  9. You only need to insure the amount you are borrowing (not the purchase price of the house)
  10. You don’t need to insure the interest payable on the mortgage, just the principal sum/amount you are borrowing. e.g 350k over 35 years.
  11.  If you have a health issue, speak to a broker before applying because if your bank declines, it will be harder for you to get coverage elsewhere.
  12. If you use e-cigarettes, the bank will charge you smoker rates (twice the price of a non-smoker).
  13. Finally, there are no exclusions on a mortgage protection policy. The insurer will cover you for death due to any reason or won’t cover you at all.

Your Guide to Mortgage Protection Insurance in Ireland 2024

Welcome to THE most comprehensive guide to mortgage protection on t’internet.

  • Would you like to know where to buy the best mortgage life insurance policy?
  • Or why you should never add serious illness cover to your policy?
  • Or how to plan for inheritance tax if you’re buying with your partner?

You don’t need to know everything there is to know about mortgage life assurance.

But if you read this blog, you’ll know more than enough to get by.

What’s the Difference Between Mortgage Protection and Life Insurance?

Let me clear it up for you.

The cover on a life insurance policy is fixed  – it doesn’t reduce. If you buy 300k life insurance and die on the first or last day of the policy, 300k will payout.

The cover on a mortgage protection policy reduces in line with the mortgage. They are designed to clear the outstanding balance on your mortgage.

All you need to get a mortgage is basic mortgage protection.

Is Mortgage Insurance Mandatory?

For a residential mortgage, the bank will insist on mortgage protection before you can drawdown your mortgage.

In some cases, the lender may waive the need for life insurance:

Waiving the need for life insurance is at the bank’s discretion.

Mortgage insurance is not required for an investment/rental mortgage.

How Much Does Mortgage Protection Cost?

couple working on finances

The cost of mortgage protection depends on the following:

  1. age
  2. smoker status
  3. amount borrowed
  4. term of mortgage
  5. health

Using Sarah and Paul above and presuming they’re non-smokers in good health, here is a range of quotes for €270,000 mortgage protection over 25 years.

  • Age 30: €17.21 per month
  • 35: €23.32 per month
  • 40: €32.54 per month

The older you are, the more expensive it becomes.

If you’re a smoker, you can double those quotes.

By the way, if you vape (even 0% nicotine ones) or use any nicotine replacement products, the insurers will class you as a smoker. Once you are 12 months “clean”, you can apply for non-smoker rates.

What Ten Factors Affect The Cost of Mortgage Protection? (your health is the one you can influence)

Do you Have to buy Mortgage Life Insurance From Your Bank?

If your bank is of the hard-sell variety, they might tell you some of these whoppers:

  • buying from a broker will hold things up
  • we will look more favourably on your mortgage application if you buy cover from us
  • our policy is cheaper
  • our insurer is better at paying claims
  • some insurers the broker’s use don’t pay claims

And so on and so-forth.

It’s all BS, but it’s up to you to stand up for yourself and say thanks but no thanks.

At least shop around for another quote, don’t let them bully you into buying their cover.

All I can say is our quotes will be lower, our service will be better, our turnaround will be faster, and our policy will contain benefits the bank can’t offer – like dual life mortgage protection for the same price as joint.

You’re not obliged to buy from the bank who gives you the loan. And it’s illegal for a bank to withhold a mortgage unless you buy insurance from them.

Don’t be a mug.

What’s the Best Mortgage Protection Policy?

You can buy mortgage protection from

  • Aviva
  • Irish Life
  • Laya
  • New Ireland
  • Royal London
  • Zurich (VHI)

We deal with all of these insurers bar Laya (who don’t deal with brokers)

What is the Best Mortgage Protection Policy in Ireland (2024 Edition)

Can a Health Issue Stop You From Getting Mortgage Protection?

Unfortunately, it can, but we’re the experts at getting cover for people with an underlying condition.

How Chronic Illness Can Affect a Mortgage Application

What Should First Time Buyers Look Out For?

A must-read before you get hoodwinked by your bank.

Guide to mortgage protection for first-time buyers

Pitfalls to Avoid if You’re Buying With Your Partner

couple working on their house budget

If you’re not married and buying together, you must read this

Mortgage Protection Cohabiting Couples

Mortgage Life Cover | Bells and Whistles

Pimp your policy with these add-ons:

Convertible mortgage protection

How to get twice the coverage for the same price : Dual life mortgage protection

Why you should think carefully before adding serious illness cover to your policy Mortgage protection serious illness cover

The smart alternative to serious illness cover. Mortgage income protection

Applying for and Buying Mortgage Insurance

Where can you get the best mortgage protection quotes?

Why you should avoid your bank like the plague

Will you need to do a medical?

When should you apply for and start your mortgage protection?

Urgent mortgage protection

What is Mortgage Income Protection?

So far, we’ve looked at mortgage protection that will pay the mortgage if you die.

But what if you get sick and can’t work?

How will you pay the mortgage and keep a roof over your head?

Having the smarts to take out mortgage income protection will make you bulletproof.

bulletproof girl

This type of insurance will provide you with an income to pay your mortgage if you can’t work due to any type illness, injury or disability that stops you from doing your job.

Ther policy will continue to pay you until you get back to work or until your policy ends.

So if you get sick on day one of your 25-year policy and can’t work again, your policy will pay you up top 75% of your income for 25 years.

How do you Assign a Life Insurance or Mortgage Protection Policy?

All explained here

What Address Should be on the Policy?

You can use your current address, as this is where the insurer will send correspondence.

You can change this to your new address once you have moved in.

Want to Know Even More?

Check out this article on how to compare mortgage protection policies in Ireland.

Over to you…

That’s the bare bones of mortgage protection.

I’m sure you have millions of other questions.

If you do, here’s a good place to start.

You can download our mortgage protection guide or sign up for our free mortgage protection course, where you’ll learn all you need to know about mortgage protection and the pitfalls to avoid.

And all in easy bite-sized pieces served fresh over email.

If you prefer a chinwag, I’m on 05793 20836.

Or, if you’re ready to go and would like me to make a recommendation, please complete this questionnaire, and I’ll be back over email with a personalised recommendation.

Nick McGowan | making life insurance easier.


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