Mortgage Insurance Cost Calculator

What Is Mortgage Insurance?

Mortgage Insurance is designed to protect you and your family’s biggest purchase: your home. It’s designed to help cover your mortgage payments if you can’t work due to illness, a serious injury, or losing your job.

There are two different types of Mortgage Protection Insurance:

• Mortgage Payment Protection Insurance
  Covers your monthly mortgage repayments for up to 24 months if illness or injury stops you working.
• Mortgage Life Insurance
  Pays off your entire mortgage so your loved ones can stay in the family home without worrying about mortgage repayments if you’re sadly no longer around.

Both types of Mortgage Protection Insurance will ease the financial burden of your mortgage payments should the unexpected happen. However, they’re very different and are designed to cover you in different circumstances.

We’ve got in-depth guides on both Mortgage Payment Protection and Mortgage Life Insurance if you want to learn more. Alternatively, give us a call on 02084327333 or email help@drewberry.co.uk to we’ll chat through your options one-on-one.

Example Cost Of Mortgage Payment Protection In 2025

Like with all insurance policies, the cost of your premiums will be determined by your personal circumstances and the policy options you choose.

As a rough guide, we’ve calculated the cost of a Mortgage Payment Protection policy for:

• A healthy 30 year old
• Office-based worker
• Non-smoker
• Guaranteed premiums
• Short term cover.

What Affects The Cost Of Mortgage Payment Protection Insurance?

When it comes to the cost of Mortgage Payment Protection Insurance, there are a number of factors that affect the price of your premiums.

Bigger Payout = Higher Premiums

As Mortgage Payment Protection Insurance is designed to cover your mortgage, the payout you choose (also referred to as the “benefit”) should align with your monthly repayments. The bigger the benefit you need, the more your premiums will be.

Some MMPI policies allow you to cover an additional 25% on top of your mortgage payment, which is more generous than Income Protection policies which only cover up to 70% of your gross income – regardless of your mortgage repayments. However, Income Protection can keep paying out until retirement age, while MPPI is limited to a year in most cases.

Short Term Cover Is Cheaper Than Long Term Cover

Mortgage payment protection policies are short term in nature, and will only pay a claim for a limited time, often up to a maximum of two years.

It’s considered a “short term Income Protection policy”. While you can’t insure as much of your income with a long term plan (up to 70%), most policies will continue paying out until the end of the policy.

When opting for a long-term policy, the end date should align with the end of your mortgage or as long as your expected retirement age.

As of 2023, more than 1,660 individual Income Protection claims have been paid out for over 10 years, with almost 400 of those being paid for more than 20 years. So if your budget allows, it’s usually worth considering a long-term policy.

The Longer The Payout, The Higher The Cost

Policy length is another factor that affects the cost of your monthly premiums. For example, a policy that ceases at age 55 will be cheaper than one that ceases at age 65.

While it’s tempting to go for what’s cheapest, you need to think about how the policy will work in reality. There’s little use paying for insurance that doesn’t serve you properly, which is why you should align the policy end date with either the end of your mortgage term or your expected retirement age.

Longer Deferred Periods Are Cheaper

When you buy Mortgage Payment Protection, you’ll need to choose the length of time to wait before getting your payout: known as the deferral period. While you might want a payout as soon as possible, this will increase your premiums.

We suggest aligning your deferral period with your sick pay. This way, when your sick pay stops, your Mortgage Protection will kick in and cover your monthly repayments.

As you can see, there are significant savings to be made by choosing a longer deferred period. If you’re able, relying on savings and sick pay could see your insurance premiums become much more competitive.

Premium Types Vary In Cost

When selecting a Mortgage Payment Protection plan, there are three different premium types to be aware of. The price you pay for a policy will vary depending on which you select.

• Guaranteed
  Guaranteed premiums cannot change over time. Your premium is fixed from the outset of the policy. While they start out more expensive, they often work out cheaper during a long-term policy
• Reviewable
  The insurer is able to “review” premiums as they see fit. For example, your premiums could go up if the insurer has received a high number of claims. Reviewable premiums are cheaper at the outset, but they can become a lot more expensive over time
• Age banded premiums
  These premiums will also increase over time. Unlike reviewable options, these can only increase by a set percentage to reflect the greater risk of claims as you age. This means you’ll know exactly what you’ll pay each year. These premiums tend to start out cheaper, but can increase significantly as you get older.

If you’re feeling overwhelmed and unsure which product is best for you, give us a call on 02084327333 or email help@drewberry.co.uk.

It won’t cost you a penny to get our advice and set up your policy. Alternatively, you can compare quotes online using our handy tool.

Alex Weir
Independent Health & Protection Expert

Example Cost Of Mortgage Life Insurance In 2025

Unlike Mortgage Payment Protection Insurance, which would provide you with a monthly payment to cover your mortgage, Mortgage Life Insurance is designed to pay off your outstanding mortgage debt with one cash lump sum should you pass away.

The cost will vary depending on a number of personal and policy factors such as your age, health and the benefit amount you opt for.

As a rough guide, we’ve calculated the cost of a Mortgage Life Insurance policy for the following person:

• 30 year old non-smoker
• Office-based worker
• No pro-existing health conditions
• Wants an individual policy for a term of 25 years
• Guaranteed premiums, decreasing cover.

What Affects The Cost Of Mortgage Life Insurance?

When it comes to the cost of Mortgage Life Insurance, there are a number of factors that affect the price of your premiums. They fall into either personal factors (things you can’t change) or policy factors (tweaks you can make to change the price).

Personal Factors

The following aspects relate to your personal circumstances, and will have an impact on how much you pay for Mortgage Life Insurance.

If You’re Older, You’ll Pay More

The older you are the more your Mortgage Insurance premiums will be. This is because with age comes greater health risks and greater chance of passing away during the policy terms. With greater risk to the insurer comes greater premiums.

Health Issues Cause Higher Premiums

Whether it’s Critical Illness Cover or Private Medical Insurance, insurers will look at your medical history to work out your Mortgage Insurance cover. If you have a pre-existing health condition, insurers will tend to:

• Provide cover but with increased premiums
• Exclude the condition you suffer from, but offer discounted premiums
• Cover you without any exclusions for a higher cost.

If you have a pre-existing health condition, it’s crucial to get expert advice before buying a Mortgage Insurance policy. We know the market inside out, so can find you the right policy for your needs at a competitive price.

Our advice is completely free, so give us a call on 02084327333 or email help@drewberry.co.uk to chat through your options.

Alex Weir
Independent Health & Protection Expert

Smoking Significantly Increases The Cost

Due to the associated health risks with smoking, most insurers will charge you a heftier Mortgage Insurance premium compared to non-smokers. Even if you don’t smoke cigarettes you could still face higher premiums if you vape or use nicotine patches. This is because most insurers deem anyone who’s used nicotine in the last 12 months as a smoker.

What If You Give Up Smoking?

The good news is, if you can prove you haven’t consumed nicotine in the last 12 months, most insurers will class you as a “non-smoker” and charge you less for Mortgage Life Insurance.

High Risk Occupations = Higher Premiums

Your job can have a big impact on the amount you pay for protection. Some jobs are higher risk than others, i.e. those working in construction or at heights are more at risk of a claim than an office worker. Because of this, insurers tend to charge those in risker jobs more.

Jobs that are deemed high risk by insurers include:

• Offshore Workers
• Carpenters
• Builders
• Farmers
• Firefighters
• Scaffolders.

Hazardous Hobbies Hike Up Premiums

It’s not just high risk jobs that will increase your Mortgage Protection premiums. Extreme and hazardous hobbies will also put you in a higher risk category for most insurers, so if you’re a keen glider, a big wave surfer, or a free solo climber, your premiums are likely to be over 25% higher than those with less adventurous hobbies.

Activities that are deemed hazardous by insurers include:

• Big wave surfing
• Off-piste skiing
• BASE jumping
• Kiteboarding
• Free climbing
• Scuba diving
• Hang gliding.

Each insurer views occupations and hazardous sports differently, so it’s best to speak with an expert before taking out a policy. By being upfront about your job and hobbies, you can continue doing the things you love with full peace of mind, knowing you’re fully protected.

Policy Factors

If you’re working with a tight budget, you can tweak the below factors to tailor the cost of your policy.

The Cost Will Increase The More Cover You Need

The more you want a policy to pay out, the higher your premiums will be. As Mortgage Life Insurance is designed to pay off your mortgage, the payout you choose (also referred to as the “benefit”) should align with the amount you have left on your mortgage.

The Longer You Need To Be Protected, The Higher Your Premiums

The longer you want a policy to be in place, the more you’ll pay for Mortgage Life Insurance. This is due to the fact that the risk of making a claim increases as we age. The length of your policy term should align with your mortgage end date.

Adding Critical Illness Cover Is Significantly More Expensive

One option you have when it comes to Mortgage Life Insurance is to add Critical Illness Cover to your policy. Many people choose this option so that they’re covered if they become unwell (i.e. cancer, heart attack or stroke), not just if they pass away.

While Critical Illness Insurance provides peace of mind, it also sharply increases the cost of your premiums.

Level Cover Is More Expensive Than Decreasing Cover

Depending on your mortgage type, you need either level cover or decreasing cover.

• Level cover
  Your payout is fixed for the life of your policy. Best suited for interest-only mortgages
• Decreasing cover
  Your payout will decrease over time. Best suited for repayment mortgages, ensuring you don’t pay only for the cover you need.

Joint Cover Naturally Costs More

If you have a joint mortgage and both want life cover, you may be tempted by a Joint Mortgage Life Insurance policy.

Covering two people on one policy increases the risk of a claim, and increases the cost of the monthly premiums.

Premium Type Affects The Cost

When choosing a Mortgage Life Insurance policy, you’ll have the option of opting for reviewable or guaranteed premiums. There’s a significant difference between the two and the cost of a policy will vary depending on which one you choose.

• Guaranteed
  Guaranteed premiums cannot change over time. Your premium is fixed from the outset of the policy. While they start out more expensive, they often work out cheaper during a long-term policy.
• Reviewable
  The insurer is able to “review” premiums as they see fit. For example, your premiums could go up if the insurer has received a high number of claims. Reviewable premiums are cheaper at the outset, but they can become a lot more expensive over time.

Compare Mortgage Insurance Quotes And Get Expert Advice

When covering something as important as your mortgage, it’s essential to understand what you’re buying. Making a mistake could have expensive consequences.

We can help you decide whether you need Mortgage Life Insurance or Mortgage Payment Protection Insurance (or potentially both). We’ll break down any complex terminology to ensure you’re buying the right policy at the right price.

For fee-free advice and access to the most competitive rates, give us a call on 02084327333 or email help@drewberry.co.uk. Alternatively, use our online quote tool to get started.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to issues as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• There is no fee for our service
• We are an award winning 🏆 independent insurance broker who works with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3908 and growing independent client reviews rating us at 4.92 / 5
• Claims support when you need it most.
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐