Mortgage Protection Insurance
Mortgage protection insurance provides peace of mind during life’s unpredictable moments. At Connect Mortgages, we tailor cover to match your home loan, ensuring your family can remain financially secure even if illness, redundancy, or worse strikes. With over 300 trusted advisers across the UK, we compare leading insurers and policies to find the right fit for your mortgage and budget.
Secure Your Home with Tailored Mortgage Protection Insurance
Mortgage Protection Insurance from Connect Mortgages ensures your family can stay in their home even if life throws the unexpected your way. Whether it’s due to illness, job loss, or death, this type of cover safeguards your mortgage by either paying off the balance or covering monthly repayments. It’s a smart financial safety net for one of life’s biggest commitments, your home.
Explore our mortgage protection and life insurance options to find the policy that matches your needs and budget.
What Is Mortgage Payment Protection Insurance?
Mortgage Payment Protection Insurance (MPPI) is designed to safeguard your home by covering your monthly mortgage repayments if you’re unable to work due to accident, sickness, or involuntary unemployment. This type of mortgage protection insurance offers short-term financial support, typically 12 to 24 months, so you can stay in your home and avoid the risk of repossession during challenging times.
Rather than leaving your mortgage unpaid, MPPI pays out a fixed monthly amount or a percentage of your salary (commonly up to 65% of your gross income). Some policies also allow you to add an additional 25% to help cover essential household expenses, such as utility bills and groceries, providing broader protection and peace of mind.
How Does Mortgage Protection Insurance Work?
Mortgage payment protection insurance covers your monthly mortgage repayments in full if they do not exceed 65% of your annual gross salary.
The insurance plan can be applied to both repayment (capital and interest) and interest-only mortgages. If you cannot work due to illness or disability, the plan will pay out for up to 12 months or until you return to work – whichever comes first.
This means that your mortgage repayments will be taken care of, and the financial burden will be reduced so you can focus on getting better. Furthermore, MPPI lets you know that your monthly mortgage payments are secure even if you cannot work.
Is Mortgage Protection Insurance Essential?
Mortgage Protection Insurance (MPI) is not legally required to obtain a mortgage. The only mandatory cover is buildings insurance. However, whether MPI is essential depends on your personal financial circumstances, family responsibilities, and existing support systems.
When Mortgage Protection Insurance Becomes Crucial
1. You Have Financial Dependents
If your partner, children, or other family members rely on your income to pay the mortgage or cover day-to-day expenses, mortgage protection insurance is strongly recommended. Without it, your loved ones could face financial hardship or be forced to sell the home in the event of your serious illness or death.
To understand more about how this differs from general life cover, visit our Life Insurance overview.
2. You Lack Strong Financial Safety Nets
Evaluate whether your current savings, investments, or existing policies, such as income protection or life insurance, would be enough to cover your mortgage payments for an extended period if your income suddenly stopped. If not, mortgage protection can bridge that gap and offer essential security.
3. Your Job Stability or Health Raises Risk
Those working in high-risk industries or living with pre-existing health conditions may find MPI or critical illness cover to be especially valuable. These options provide financial protection in case you’re unable to work due to unforeseen health issues. Explore our Critical Illness Cover guide for more on tailored solutions.
4. Your Mortgage Type Influences Coverage Needs
If you have a repayment mortgage, a decreasing term mortgage protection policy could be a cost-effective solution. This type of policy reduces in line with your outstanding mortgage balance.
For interest-only mortgages, where the balance stays constant, a level term policy that pays out a fixed lump sum may be more appropriate.
You can explore both scenarios using our free Mortgage Calculators to determine the right level of cover.
Having MPPI can be especially important if you have dependents who rely on your income for their well-being and financial security. It is also valuable to those who are self-employed, as they may not be eligible for state benefits in the event of unemployment due to ill health.
What Does Mortgage Payment Protection Insurance Cover?
Mortgage Payment Protection Insurance (MPPI) covers your monthly mortgage payments if you can’t work due to accident, sickness, or involuntary unemployment (redundancy), paying out a monthly income for up to 12 or 24 months to prevent repossession. It often lets you add an extra 25% to cover other bills and offers options to protect against illness, unemployment, or both, with payments stopping when you return to work or the term ends.
What MPPI Typically Covers
- Accident & Sickness Cover: Receive monthly payments if you’re unable to work due to physical or mental health conditions, supporting your mortgage and essential costs during recovery.
- Unemployment Cover: If you’re made redundant through no fault of your own, this policy helps you stay afloat by covering your mortgage payments until you’re re-employed or the term ends.
- Mortgage Repayment Protection: The core benefit of MPPI is covering your monthly mortgage costs, directly protecting your home and credit rating during periods of lost income.
Additional Household Expense Cover (Optional)
Some providers offer an extra buffer, typically up to 25% of your mortgage payment, to help with everyday expenses such as utility bills and groceries.
Back-to-Work Support Services
Select plans also include helpful features such as CV writing assistance and job interview coaching, helping you return to work faster.
Looking for more tailored cover? Visit our Critical Illness Cover page for long-term protection against major health events.
Key Features of Mortgage Payment Protection Insurance
- Benefit Duration: Payments typically last 12 to 24 months, depending on your policy.
- Monthly Payment Limits: Most plans pay out up to 65–75% of your gross income, or a fixed maximum (e.g. £3,000/month).
- Customisable Coverage: Choose between accident & sickness, unemployment, or a combined policy to suit your situation.
Use our Mortgage Calculators to estimate how much cover you may need for your monthly payments.
Mortgage Protection Insurance Exclusions: What’s Not Covered
While Mortgage Payment Protection Insurance (MPPI) offers vital financial support during unexpected illness, injury, or redundancy, it’s important to understand the limitations. Most policies include exclusions that could affect your eligibility to claim. Below is a breakdown of common MPPI exclusions to help you make an informed decision before applying.
For a full overview of how this type of cover works, visit our Mortgage Protection Insurance guide.
Unemployment-Related Exclusions
MPPI typically covers involuntary unemployment, but not every job loss qualifies for a claim. Here are situations that may not be covered:
- Voluntary Resignation or Redundancy: If you leave your job willingly or accept a voluntary redundancy package, your claim will likely be denied.
- Dismissal Due to Misconduct: Being dismissed for poor performance, breach of contract, or misconduct is considered preventable and is usually not covered.
- Known Risk of Redundancy: If you were aware of potential redundancy before taking out the policy, you cannot claim.
- Temporary or Zero-Hour Contracts: Casual, seasonal, or contract workers may not be eligible for unemployment benefits under MPPI. Learn more about employment eligibility on our Income Protection page.
- Refusal of Suitable Employment: Turning down an alternative role offered by your employer can disqualify your claim.
- Self-Employment Restrictions: Self-employed individuals may only claim if their business has officially ceased trading, with documentation from HMRC confirming the closure due to insolvency.
Protecting Your Mortgage with the Right Policy
Understanding these exclusions is key to selecting a policy that truly protects your home and finances. At Connect Mortgages, our advisers help you compare Mortgage Protection and Life Insurance options tailored to your employment type, health background, and family needs.
Explore our full range of mortgage protection solutions.
FAQs: Mortgage Protection Insurance
Most frequent questions and answers about mortgage protection insurance
Mortgage Advice..
Thinking of getting a mortgage? Our experienced team of skilled mortgage advisers are here to offer the essential guidance you require. Relying on our comprehensive understanding of the mortgage market, we’ll ensure you secure the perfect mortgage to suit your specific situation.
Unfortunately, mortgage protection insurance is not tax deductible. However, other types of insurance may be eligible for a tax deduction. These include medical expenses, disability insurance, and long-term care insurance. Consult a certified tax professional to determine which insurance could help you minimise your taxes.
Mortgage protection insurance will last as long as your mortgage loan is active. However, the length of coverage can vary depending on the specific policy you have purchased. Most mortgage protection insurance policies run anywhere from 10 to 30 years. Sometimes, they may be extended if an additional repayment option is added to the loan.
It is generally recommended to have both homeowners and mortgage protection insurance. Homeowner’s insurance provides coverage for the structure of your home. In contrast, mortgage protection insurance offers a different range that can help you avoid foreclosure if you cannot repay your loan.
The borrower’s age is an essential factor when considering mortgage protection insurance. Generally, most mortgage protection policies are less expensive for younger borrowers since they will likely have more years of payments ahead of them. However, some policies may offer reduced rates or special conditions based on age.
Yes, spousal policies are available for mortgage protection insurance. Generally, this policy provides coverage to both the primary borrower and their spouse in case of a default on loan. This type of coverage is designed to help protect both parties from financial hardship caused by an inability to make payments.
What next?
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Liz Syms is the CEO and Founder of Connect Mortgages, a specialist in finance for property investment. With over 25 years of experience in mortgages and financial services, Liz has helped countless people get their dream homes and investment properties. She is passionate about giving her clients the best advice possible when it comes to financial decisions relating to mortgages and protection and is dedicated to providing the highest quality of service. With her wealth of knowledge in the industry, Liz is a respected leader in mortgages and financial services and has grown her team to over 300 advisers nationally. She strives to make Connect Mortgages one of the most successful companies in its field.
About the Author
Liz Syms is the CEO and Founder of Connect Mortgages, a specialist in finance for property investment. With over 25 years of experience in mortgages and financial services, Liz has helped countless people get their dream homes and investment properties. She is passionate about giving her clients the best advice possible when it comes to financial decisions relating to mortgages and protection and is dedicated to providing the highest quality of service. With her wealth of knowledge in the industry, Liz is a respected leader in mortgages and financial services and has grown her team to over 300 advisers nationally. She strives to make Connect Mortgages one of the most successful companies in its field.