If you have a Mortgage, you may be able to save a few quid…

Over the last while I have received several queries from people who have purchased new homes in the locality in recent years. When you take out a mortgage to purchase a home, generally the mortgage company requires that a mortgage protection policy be in place when contracts are being signed.

At a time that can be quite stressful, using a bank to set up a mortgage protection policy can be the easiest, straight-forward option. While there is no issue with using a bank to set up your mortgage protection, some people do not realise that they are not obliged to take a policy out directly with the bank. Many people are not aware that you can shop around at any stage to find a more competitive premium for your policy.

Mortgage Protection is a cheaper form of life assurance, as the cover reduces in line with your reducing mortgage balance, unlike more traditional life assurance cover that remains constant (or can even increase) during the life of the policy. The purpose of this cover is simply to repay your mortgage in the event of your death and this gives security knowing that the mortgage balance will be cleared.

When I receive enquiries from people to review their mortgage protection I have access to multiple providers in the market, which allows me to compare premiums to find the most competitive cost available. It is worth enquiring to see if you can reduce your monthly premium cost. At times during the year, the life companies provide brokers with special offers like reduced rates or additional benefits to be included on your policy.

There has been instances where upon reviewing mortgage protection taken out in the last few years, I have been able to save people between 10-30% of the cost for the exact same cover.

Let’s say for example, that your mortgage protection premium is €50 per month and your mortgage term is for 25 years. If it transpired that you could save perhaps 20% in the cost of the cover by moving provider, it could mean a savings of up to €3,000 over the 25-year term.

Even if you took out the policy in the last few months, you are not obliged to maintain it once you have alternative cover set up in its place. Please note, do not ever cancel life assurance until you have replacement cover in place and active.