Do you need income protection to get a mortgage?

No, you’re not legally required to take out income protection before or after obtaining a mortgage.

However, while you’re not obligated to take out income protection for a mortgage, it can be extremely beneficial to have protection in place to ensure your payments are covered.

A mortgage is the largest debt we’ll incur in our lifetime, so it makes sense to protect it.

If illness or injury prevented you from working, could you afford to keep up to date with your monthly payments?

Or would you be left struggling financially?

Reassured are an FCA-regulated broker who can help you compare income protection quotes from the whole of the market.

This can allow you to find the right policy to protect your mortgage at the best available price.

Simply get in touch for your free quotes.

But just how can income protection help to cover your mortgage? Keep reading this article to find out everything you need to know...

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What is mortgage income protection?

There’s no specific product called mortgage income protection; you’ll simply need to take out an income protection policy with its main purpose being to protect your mortgage.

If you’re unable to work due to illness or injury, an income protection policy could provide you with monthly payments to help cover your mortgage repayments.

As the payments you receive aren’t tied to a specific financial commitment, income protection could also help to cover:

  • Household bills (water, gas, electric)
  • Childcare costs (additional childcare while you recover)
  • Living costs (weekly food shop, phone bill, clothes)
  • Leisure expenses (hobbies, socialising, after school clubs for kids)
  • Transportation (bus or train fare, petrol, taxis)

Why not input your monthly expenses into our handy income protection insurance calculator to find out how much cover you may require?

How much mortgage income protection do you need?

Enter your monthly financial commitments to calculate the level of mortgage income protection cover may require.

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£723 a month is the average monthly mortgage payment in the UK, with the average monthly rental price coming in at £700.

The majority of our monthly income will go towards rental or mortgage payments.

For this reason, it’s essential to have precautions in place to ensure you could keep up to date with your payments if you weren’t receiving your usual income.

Monthly income protection payments can help to cover this large expense and ensure you can stay in your home.
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According to the Money Advice Service, the average household spends £340 a month on household bills.

This includes electricity, gas, TV and broadband.
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Childcare costs are on the rise with it now costing £137.69 per week for part-time nursery for a child under the age of two.

That’s over £550 per month - is this an amount you’d be able to keep up with if you were unable to work?

Becoming ill could also result in the need for additional childcare while you attend doctors’ appointments or medical treatment.
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The average household in the UK spends around £97 a week on their food shop, totaling £388 a month.

While this may seem like a small amount in comparison to some of the other expenses mentioned, the food shop is often where we try to scrimp and save when we fall on hard times.

Income protection can take care of the cost of your weekly food shop, as well as many other essential costs.
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At the beginning of 2020, credit card debt in the UK was at £2.1 billion, with almost 27 million UK residents in some kind of debt.

Becoming unable to work could make it hard to keep up with credit card or loan payments (including car finance or other financed goods).

Failure to keep up with payments could result in additional interest being incurred or late fees issues - resulting in a higher total needing to be paid.
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The average spent on public transport each month comes to an average of £94.

This includes the cost of public transport, as well as petrol and diesel vehicles.

While this amount may reduce while you’re unable to work as you won’t need to commute there may be additional spending on public transportation if your illness or injury leaves you unable to drive.
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Your total cover estimate

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Let us find your best quotes.

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What’s the difference between income protection and mortgage protection?

The difference between income protection and mortgage protection is that income protection payments aren’t tied to a specific financial commitment.

Income protection is designed to pay out a percentage of your usual earnings, in monthly payments, in the event that you can’t work due to illness or injury.

This means the funds will be paid directly to you and you have the freedom to use them however you see fit.

Whereas mortgage payment protection will pay out funds to specifically cover your mortgage payments if you can’t work due to illness, injury or unemployment.

Often, the funds will be paid directly to your mortgage lender. This means you can’t use them to cover any other financial commitments.

Mortgage income protection

Income protection:

  • Can pay out to you if you can’t work due to illness or injury
  • Payment period can be short term (maximum up to 1 - 5 years) or long term (up until retirement)
  • Could pay out up to 70% of your usual income
  • Payments will be paid directly to you to spend as you wish
  • You can use the payments to help cover a wide range of essential costs
  • Can be taken out through Reassured from as little as 20p-a-day
Mortgage payment protection

Mortgage payment protection:

  • Can pay out to you if you can’t work due to illness, injury or unemployment
  • Payment period will be short term (up to a maximum of 2 years)
  • Can pay out the full cost of your monthly mortgage (unless this exceeds 65% of your usual income)
  • Payments are often paid directly to your mortgage lender
  • Payments can only be used to help cover your mortgage
  • Not available through Reassured

Speak to a friendly member of the Reassured team about protecting your mortgage with income protection.

Simply get in touch for fee free, personalised and no obligation quotes.

Who needs mortgage income protection?

Anyone with a mortgage can benefit from having protection in place to ensure you can keep up with your monthly payments should anything happen to you.

In particular, you may benefit from mortgage income protection if you:

  • Are self-employed - Being self-employed means you won’t benefit from employee benefits, such as sick pay. So, if you’re unable to work, you’ll miss out on pay until you make a full recovery. Could you afford your mortgage payments during this time, or would you feel forced to go back to work just to find the funds?
  • Don’t benefit from full sick pay - While sick pay can help to ease financial stress, not everyone has the same entitlement. For example, those receiving just statutory sick pay will only receive £116.75 per week (which roughly totals £467 per month)[1]. Is this enough to help cover your mortgage payments as well as other essential costs?
  • Don’t have your own savings - Having savings can allow you to top up any financial aid you may receive to help cover your monthly outgoings, but are you part of the 11 million working-age UK residents that don't have basic rainy day savings (at least £1,000)[2] to fall back on?
  • Have a partner/family to support - Often a mortgage is a shared financial commitment between you and a partner. If you’re the main breadwinner, could you and your partner keep up with your mortgage payments while you’re unable to work?

Income protection is designed to provide financial support when you need it the most, helping you to continue your current lifestyle without having to make cutbacks or rely on others.

Why not talk your needs through with Reassured to make sure you’re taking out the right cover to meet your needs?

Best mortgage income protection

The best mortgage income protection for you will be the policy that pays the right amount to help cover the cost of your monthly mortgage payments, at the most affordable price.

When choosing the best income protection, there are some key policy terms that you should be aware of:

Policy Term

Policy term - This is how long your policy will last for. If taking out cover to protect your mortgage, you’ll want to make sure your policy term is at least the same length as your mortgage term.
Payment Period

Payment period - This refers to how long you’ll receive payments for. Payment periods are typically short-term (receive payments up to a maximum of 1 - 5 years) or long-term (potential to receive payments until you reach retirement age).
Deferred Period clock

Deferred period - Also known as a ‘waiting period’. This is the period of time which must pass in order for your payments to begin. Common deferred periods are between 4 – 52 weeks but may vary depending on the provider.
Definition of Incapacity

Definition of incapacity - This refers to what makes you eligible to make a claim. Most policies will come with an ‘own occupation' definition which will allow you to make a claim if you’re unable to do your specific job.
Premium Type

Premium type - This is how you’ll pay for your cover. Typically, premiums can be guaranteed (stay the same), reviewable (change over time) or age-banded (increase each year as you get older).

The team at Reassured can take you through every step of the application process, answer any questions you may have and decode any industry jargon you may not be familiar with.

How much is income protection for a mortgage?

Income protection can be taken out through Reassured from just 20p-a-day.

However, the exact price you pay will vary depending on your personal circumstances.

When calculating your income protection premium, providers will take key information into consideration.

Personal details you’ll be required to provide include:

  • Age
  • Smoking status
  • Occupation
  • Medical history
  • Lifestyle (such as whether you have any high-risk hobbies)

Details about your policy which influence the price you pay include:

  • Policy length
  • Payment period (short-term or long-term)
  • Deferred period
  • Definition of incapacity
  • Premium type

The table below shows example quotes for an income protection policy.

Quotes are based on a non-smoker, in good health, with an annual income of £30,000. The policy has a deferred period of 3 months and a 1-year payment period, with a policy length until age 65.

AgePremium per month
20£5.85
25£6.14
30£6.41
35£6.88
40£8.60
45£11.00
50£14.63


Comparing quotes is the best way to find the right income protection policy to protect your mortgage, at a price that suits your budget.

Why not compare quotes, free of charge and from as little as 20p-a-day, through Reassured?

Is mortgage income protection the same as PPI?

No, mortgage income protection and payment protection insurance (PPI) aren’t the same.

Income protection is a policy that can help to replace lost earnings if you were to become too ill or injured to work.

These payments can then be used to help cover living costs to prevent you from struggling financially or having to rely on help from others.

Whereas PPI is often sold alongside products that require you to make regular payments (such as a mortgage, credit card or loan).

When making a PPI claim, the funds will often be paid directly to the lender to cover your payment.

PPI isn’t something that’s offered by Reassured.

However, a friendly member of the team will be happy to help you compare income protection quotes from the whole of the market.

Can I get a mortgage while on income protection?

Yes, it can be possible to take out a mortgage while you’re receiving income protection payments.

However, if you are receiving short term payments, you may need to wait until your payment period has come to an end and you have returned to work in order for your application to be approved.

This is because your financial situation is likely to change before, during and after receiving payments.

If you are receiving long term payments, you should still be able to obtain a mortgage as this is your long term form of income.

If you’re receiving income protection payments and are worried about your ability to secure a mortgage, there are specialist mortgage lenders who may be able to help.

Income protection vs life insurance for a mortgage

Both income protection and life insurance can help you protect your mortgage.

As each policy will cover you for different circumstances, one isn’t necessarily better than the other.

If it’s within your budget, both policies could be purchased simultaneously to provide a comprehensive cover option.

  1. Income protection to ensure you can continue making payments if you’re unable to work
  2. Life insurance to pay off the mortgage in full or allow loved ones to continue making monthly payments after your passing
Income protectionLife insurance
Can pay out to you if you’re unable to work due to illness or injuryCan pay out to your loved ones upon your passing
Will pay out in monthly payments (to mimic an income)Payment will be made in a lump sum
Payments can be used to help cover monthly mortgage paymentsCould help loved ones to pay off the mortgage in full or keep up with monthly payments
Can also be used to help cover other essential costsCan also be used to help cover other essential costs
Can be taken out through Reassured from just 20p-a-dayCan be taken out through Reassured from just 20p-a-day †


Reassured can help you conduct a full income protection vs life insurance comparison to help you find your ideal solution.

Simply get in touch for your free quotes.

Income protection for mortgage - Compare quotes

Compare mortgage income protection quotes using the services of Reassured.

A friendly member of the team can help you compare quotes from all the UK’s best income protection providers, to help you find the right policy to protect your mortgage.

The team can also help you compare other policies to help protect a mortgage such as life insurance and critical illness cover.

Quotes through Reassured start from just 20p-a-day, are fee-free and completely without obligation.

Simply get in touch.

Compare Mortgage Income Protection Quotes »

Sources:

[1] https://www.gov.uk/statutory-sick-pay

[2] https://www.theguardian.com/business/2024/feb/12/more-than-11-million-britons-have-less-than-1000-in-savings

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