SYS Group Financial Consultant Padraic Ryan offers his insight into the world of Mortgage Protection and what options might be available to you.
There has been lots of talk in the finance world over the last couple of months about the Irish Property & Mortgage market and where it is headed. This has been fuelled by the exit of Ulster Bank from the Irish market after more than 160 years, closely followed by the withdrawal of Belgian- owned KBC Bank which has left their customers in limbo. While Mortgage customers of these institutions do not necessarily need to do anything now, many are being advised to review their rates. This is a result of some of the remaining lenders increasing their rates due to continued inflation which we are seeing, week on week. To add further fuel to the fire, the ECB have just announced an interest rate hike for the first time in 11 years of 0.5% in an attempt to curb inflation which will affect all customers on tracker mortgage rates. Traditionally, tracker rates were considered a safe bet as noted by our SYS Mortgage Manager, Helen Slattery in a recent article. However, if a further three interest rates hikes are imposed by the ECB as predicted by analysts, it may be of interest to review your tracker rate with a broker who can guide you towards any potential savings.
Review Your Mortgage Protection
Something that often gets overlooked in the process of reviewing your Mortgage rate, is your Mortgage Protection cover, also known as Mortgage Life Insurance. A Mortgage Protection policy is a compulsory life insurance plan that must be taken out and assigned to your lender before drawing down or switching your mortgage. The policy does essentially what it says on the tin – should you be unfortunate to die during the term of your Mortgage, the life insurance company pays out on your plan to the lender, wiping your mortgage and the burden the repayments would be on your spouse or family. The policy works on a decreasing cover basis, so as the outstanding balance on your Mortgage reduces, so does your level of cover in line with the term of your mortgage.
Make A Saving
What I have found when meeting clients and reviewing their suite of protection policies is that often, their Mortgage Protection policies are organised with the lender to which they have been approved for a Mortgage. The lender offers them a “convenient” and “low-cost” policy which coincides with their monthly mortgage payments, so the actual cost of the policy is usually hidden to the common eye. Most lenders only deal with one life company, so it is also likely you are not getting presented with the most suitable product for your needs that is available in the Irish market. Recently I helped a couple to secure a cheaper and superior Mortgage Protection policy which has saved them €10 a month. On first look, this doesn’t seem a whole pile of saving, however when you calculate the savings over the term of the Mortgage (22 years in this example) it equated to a massive €2,640.
Keep in mind that it’s not just those currently assessing their mortgage rate that should be reviewing their Mortgage Protection policy. If your plan is more that 5 years old, you could possibly be over-paying and we might be able to help you find a superior plan out there, which better suits your needs. Reviewing your plan is easy. Just drop me a line at firstname.lastname@example.org or give me a call on 087 166 9498 to evaluate your policy – hassle free! Alternatively, here is the link to enquiry form on our website. Leave your details and I will get back to you.
Mise le Meas,