Life Assurance Companies and Endowment mortgages

Some life companies are beginning to issue special MPPs that automatically cover this risk. If you do not have one of these and have at any point extended the term of your mortgage, the most sensible thing to do is simply write to your insurance company informing them of this fact.

It's then up to them whether to increase the premium rates.

Other types of insurance connected with house-buying Mortgage insurance guarantees

These policies -sometimes called 'indemnity guarantees' -are paid for by the borrower, but it is the building society who will benefit from them.

The circumstances in which they are required will depend on the rules of the particular lender, but generally will be if you are borrowing in excess of 80% (sometimes 75%) of the valuation of the property.

Most lenders will give you a choice as to whether to pay for the insurance in one lump sum or add the amount to your loan. Table 26 gives two examples of how this type of policy works, and the likely cost.

What about joint-life policy

If you decide to take out a joint-life policy, however, there is one extremely important point to be made. You can choose either a `joint-life/last-survivor' policy, which will be marginally cheaper, or a Joint-life/first death' policy.

The latter is the only one worth considering. The former would pay out the proceeds only on the second death, not the first; so, if the main breadwinner of a couple died, the survivor would in effect not be covered by the insurance but would have to continue paying the mortgage.

Term assurance, in any form, is cheap -particularly if youre young when you take it out. These days, however, you can choose various `frills' to add on to your term assurance policy.

The policy can be `convertible', . . .... see: What about joint-life policy

Current Mortgage Offers

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    Finding the right mortgage can be stressful, but we’re here to help you every step of the way.

    Even if you have no proof of income, poor credit rating or facing repossession of your home, we can normally say YES (even if the high street lenders have said NO)!

    Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 7.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but our average fee is 2.36% of the loan value. We are authorised and regulated by the Financial Services Authority for regulated mortgage and non-investment insurance contracts.