Do I have to buy mortgage protection from my bank?
It can often be cheaper and quicker to buy mortgage protection insurance elsewhere.
If you’re on the journey to buying your first home you’re probably well up-to-speed on the Central Bank’s mortgage lending rules and things like stamp duty and solicitor’s fees at this stage.
However the issue of mortgage protection rarely features highly on prospective homebuyers’ minds until the very last minute and is often a major stumbling block to getting a mortgage fully approved and drawn down.
What’s more, people are often under the illusion that you must also take out mortgage protection with the bank that’s giving you your mortgage, meaning people could be missing out on big savings by not shopping around.
In this guide we’ll tell you all you need to know about buying mortgage protection and how to get the best value.
But first, a quick reminder: what is mortgage protection?
Mortgage protection, also called mortgage life insurance, is a form of insurance that will pay off the outstanding balance on your mortgage if you die before it’s been paid off.
It gives your bank peace of mind that the mortgage will be repaid and your dependants peace of mind that nothing will happen to their home.
By law in Ireland mortgage protection is usually compulsory for all mortgage holders meaning if you don’t have a policy in force you can’t draw down your mortgage and you won’t get the keys to your new home.
Do I have to take out mortgage protection with my bank?
Banks and lenders will usually offer you their own mortgage protection prior to you drawing down your mortgage loan. And while it might seem convenient to go with the same company for both your mortgage and your insurance, by law you’re under no obligation to take out mortgage protection with the same lender or bank that is giving you your mortgage.
Not buying mortgage protection from your lender won’t affect your application in any way and quite often it can be cheaper and quicker to buy your mortgage protection elsewhere.
That’s because banks are tied to a sole life insurer and can offer you just one price for mortgage protection. However insurance brokers like bonkers.ie can compare prices across multiple insurers to find the best cover for your needs. And when it’s time to buy, you can apply online on our site in just minutes too and we’ll stay with you right through until your policy has issued.
In addition our dedicated team of in-house insurance specialists can arrange cover for mortgage protection in as little as one hour in some cases so there is no need to worry about any impact or delay using us might have on your mortgage application or drawdown date.
Buying your first home can be a stressful time. There’s lots to consider and quite often people leave arranging mortgage protection until the very last minute.
But by taking the time to shop around and compare the best prices, you could really save over the longer term.
Because your mortgage protection policy has to run for the entire length of your mortgage, you could be paying it for over 30 years. Why overpay on a product that you could be paying for this long?
Saving even just €10 a month by shopping around could see you net an extra €3,600. Not bad for a few minutes’ extra work.
Visit our mortgage centre
Wherever you are in your mortgage journey, at bonkers.ie we're here to make it easier. We have assembled everything you’ll need in our mortgage centre where you can use our mortgage calculator to find the cheapest interest rates and our insurance service to get the best mortgage protection quotes.