MORTGAGE INSURANCE


MORTGAGE PAYMENT PROTECTION INSURANCE

Not too long ago the state would give you quite a lot of help if you lost your job and couldn't afford your mortgage payments but that's changed.

Anyone who has mortgaged - or remortgaged - since 1st October 1995 is now only eligible for state assistance nine months after becoming unemployed or disabled. Even then any state assistance would be means tested and will only cover the interest payments i.e. not endowment payments or capital repayments.

If your mortgage is for more than $100,000 you won't get any help at all.

What you need to cover you is Mortgage Payment Protection Insurance. At the time of writing only one in five mortgage payers has this type of policy - though there are now moves by the government to make them compulsory.

What you're looking for is;
  • When do the payments start - usually after an "excess" of 30 to 60 days.
  • How long do they last for - usually only for 12 months but sometimes 24 months.


Cost
At the time of writing, a fair price for a Mortgage Payment Protection policy would be around $4.50 a month for every $100 of monthly payments for 12 months cover. This would start after an "excess" of 30 days (i.e. it would start being paid after 30 days).

The highest prices are around $7 for every $100 of monthly payments - though some of these give 2 years cover.

Over a year this could be a difference of $180. Over the life of your mortgage it adds up to $4,500.

Whatever the price, you would have to make sure that it would cover what you'd need.