One of the biggest concerns for homeowners is what happens to their mortgage if they die. Will their family be forced to sell the home? Mortgage protection insurance is designed to prevent this, but it needs to be properly coordinated with your estate plan.
Mortgage protection insurance (also called mortgage life insurance) is a type of decreasing term life insurance. The payout decreases over time in line with your outstanding mortgage balance, and it's designed to clear the mortgage if you die during the term.
In 2026, the average monthly cost for mortgage protection on a £200,000 repayment mortgage over 25 years is approximately £15-£25 per month for a non-smoker aged 35. It's a relatively small price for significant peace of mind.
However, having mortgage protection doesn't remove the need for a Will. Without a Will, the property may not pass to who you expect, even if the mortgage is paid off. If you own the property as tenants in common, your share will be distributed according to intestacy rules.
We always recommend that mortgage protection insurance is written in Trust. This ensures the payout goes directly to the mortgage lender without forming part of your estate, avoiding potential IHT complications.
If you're buying a new home, remortgaging, or simply reviewing your finances, it's an ideal time to also review your Will and estate plan. At Castle Family Legal, we can help ensure everything works together seamlessly.
