Paying your mortgage is a massive monthly layout for many of us, so what would happen if your income stopped? We see if MPPI is worth having.
By Sarah Jagger
4Homes Essentials
Property Search
UK Region Ratings
Mortgage payment protection insurance (MPPI) pays out an amount equivalent to your monthly mortgage payment one month after your income stops because of accident, sickness or redundancy. The benefit is then paid for 12 months (occasionally 24 months). MPPI is sometimes known as accident, sickness and unemployment insurance (ASU).
There is no help for the first nine months of unemployment or disability for mortgages taken since October 1995 and state benefits for people in this situation are limited, and means tested, so if you have savings you’d be expected to use them first.
The cost is linked to each £100 of your monthly mortgage repayment, around £3 to £7 per £100. However, you can pay as much as £50 to £60 a month. Use the Financial Services Authority’s tables to compare policies.
No you don’t have to have it unless it’s a condition of your mortgage, and you certainly don’t have to buy it from your lender. You won’t be able to get cover if you are self-employed, on a short-term contract or over 60.
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