A plain-English beginner’s guide to mortgage protection — how it works, what it costs, and when you need it.
⚡ Quick Answer:
Mortgage protection is a life insurance policy that clears your mortgage if you die during the term.
It’s compulsory in Ireland for residential mortgages (with some exceptions).
The cover amount reduces as your mortgage reduces, but your monthly payments stay the same.
What is Mortgage Protection?
In Ireland, mortgage protection is a compulsory life insurance policy if you’re buying your own home with a mortgage.
It reduces (step by step) as your outstanding balance reduces, and if you die before the loan is cleared, the policy pays off the mortgage in full.
Without it, lenders simply won’t release your mortgage funds.
How Mortgage Protection Works (Step by Step)
- You take out a mortgage — The bank requires you to have a mortgage protection policy in place.
- The cover decreases — It doesn’t matter how the bank balance reduces, the cover falls in line along the mortgage timeline.
- The policy pays off — If you die during the term, the outstanding balance is cleared directly by the insurer to the bank.
- Your family benefits indirectly — Because there’s no mortgage hanging over them, your family keeps the house.
- If you outlive the mortgage — The policy expires. There’s no payout once the mortgage is done.
When Do You Need It?
You need mortgage protection in place before drawdown.
In fact, most buyers arrange it at the binding contracts stage.
How Much Does It Cost?
Premiums depend on:
- Your age
- Whether you smoke or vape (insurers treat both as smokers)
- The loan amount & mortgage term
- Your health
Typical example: Age 30, €270k mortgage over 25 years = around €17/month.
Smokers pay roughly double. Vapers count as smokers until nicotine-free for 12 months.
Common Questions (Beginners FAQs)
Do I have to buy mortgage protection from my bank?
No. While your bank will offer you a policy, you’re free to shop around — and you’ll almost always get better quotes and benefits from a broker.
What if I already have life insurance?
You can assign an existing life insurance policy to your bank, but most people take out a new mortgage protection policy because it’s usually cheaper and specifically tailored for the mortgage.
What if I have health issues?
Don’t panic. Different insurers assess conditions differently. That’s where a specialist broker comes in — we know which insurers are most lenient for which health conditions.
Want a printable version with examples and pitfalls?
Download our free PDF guide and keep it handy as you go through the mortgage process.
⬇ Download the Guide
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