How to Get the Best Mortgage Protection Insurance in the UK: A Comprehensive Guide
- Jamie Reid - Credit, Loans & Everyday Money Writer
- Feb 25
- 4 min read
Updated: May 3
Your home is likely one of your biggest investments, and your mortgage is one of your biggest financial responsibilities. If you were unable to work due to illness, injury, or redundancy, could you still keep up with your repayments?
Mortgage protection insurance is designed to ensure you can. This guide explains the types of cover available, how they work, and how to choose the right policy for your circumstances.
What Is Mortgage Protection Insurance?
Mortgage protection insurance is a type of financial safety net that helps you cover your monthly mortgage repayments if you’re unable to work due to specific reasons such as:
Illness
Injury
Redundancy
Depending on the policy, it may cover you for a set period (such as 12 or 24 months), or pay out a lump sum. The aim is to protect your home and prevent repossession during a time of financial difficulty.
Types of Mortgage Protection Cover
1. Mortgage Payment Protection Insurance (MPPI)
MPPI is the most common type. It pays your monthly mortgage repayments for a set period if you lose your job or can’t work due to sickness or an accident.
Key features include:
Monthly benefit paid directly to you or your lender
Cover typically lasts 12–24 months
Some policies cover redundancy, others cover illness/injury — some cover both
2. Income Protection Insurance
This is broader than MPPI. It replaces a portion of your income if you can’t work due to illness or injury. While it’s not mortgage-specific, you can use the payout to cover any expenses — including mortgage repayments.
It typically pays until:
You return to work
You retire
Or a set period ends (short-term policies)
3. Life Insurance
While not a direct replacement for monthly repayments, life insurance is critical if you want your mortgage paid off in full if you die. It pays a lump sum to your loved ones, who can then clear the outstanding mortgage balance.
Two common types:
Level term: Pays a fixed lump sum regardless of when you die during the policy
Decreasing term: The payout reduces over time, aligning with your repayment mortgage balance
Features to Consider When Choosing a Policy
When shopping for mortgage protection insurance, focus on the following:
Monthly benefit amount – Ensure it matches your full mortgage repayment
Maximum payout period – Choose between 12, 18, or 24 months, depending on your risk level
Waiting period (deferment) – This is the time you must wait before payments begin (usually 30 to 90 days)
Cover type – Accident & sickness, unemployment only, or all three combined
Premium type – Some policies have fixed monthly premiums; others may increase with age or after claims
Exclusions – Watch out for pre-existing conditions, voluntary redundancy exclusions, and specific job types not covered
Step-by-Step: How to Choose the Right Mortgage Protection Policy
Work out your risk level
Consider your job security, health, and savings. If you’re self-employed or in a high-risk occupation, a more comprehensive policy may be needed.
Decide what you want to protect against
Do you want cover for redundancy only, or also for illness and injury? Combined policies cost more but offer wider protection.
Calculate how much cover you need
Work out your monthly mortgage payment and any other essential bills. Make sure the benefit amount will cover all your key outgoings.
Compare multiple quotes
Look beyond just the cheapest premium. Compare features, waiting periods, and payout limits.
Read the policy wording
Understand what’s included and excluded. Some policies won’t pay out if you’ve recently changed jobs, are self-employed, or were aware of a pending redundancy.
Consider life cover at the same time
If your goal is full peace of mind, a life insurance policy alongside MPPI or income protection may give your family financial stability regardless of what happens.
Overlooked Tip: Match the Policy Type to Your Mortgage Type
Most people forget to align their insurance policy with their actual mortgage. This small step can save money and provide better protection.
Repayment mortgage: A decreasing term life insurance policy is often more cost-effective. The payout reduces in line with your mortgage balance.
Interest-only mortgage: A level term life insurance policy may be more suitable as your mortgage balance remains the same.
Matching your cover to your mortgage type avoids overpaying for unnecessary protection — or underinsuring yourself.
FAQs
Do I have to get mortgage protection insurance?
No, it’s not legally required. However, it provides a financial safety net and may be recommended by lenders or brokers.
What’s the difference between MPPI and income protection?
MPPI is limited to your mortgage repayments and pays for a short-term period. Income protection covers a portion of your income and may pay until you recover, retire, or reach the end of the policy term.
Can I get cover if I’m self-employed?
Yes, but options may be more limited, and you might need to provide extra proof of income. Income protection is often more suitable than MPPI for self-employed individuals.
How long do I need to wait before making a claim?
This depends on your policy’s deferment period. It’s usually 30, 60, or 90 days after you're first unable to work.
Does mortgage protection cover redundancy?
Only if you choose a policy that includes unemployment cover. Not all MPPI policies do, so check carefully before buying.
Final Thoughts
Your mortgage is likely your biggest monthly expense — and one you can’t afford to miss. Mortgage protection insurance gives you peace of mind that if life takes an unexpected turn, your home is still secure.
Whether you need short-term cover through MPPI or a more comprehensive income protection policy, the key is finding the right balance between affordability and adequate coverage. Review your options carefully, tailor them to your circumstances, and don’t forget to reassess your cover as your financial situation changes.
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Please note: All content on SmartWithMoney.co.uk is for informational purposes only and does not constitute financial advice. Always seek guidance from a qualified financial adviser before making any financial decisions.
