Switching mortgage (specifically mortgage protection insurance)

ncmc

My mortgage is currently with Mars Capital (originally taken out with Irish Nationwide) and our interest rates are very high (3.65% on our main mortgage and 4.15% on a top up we got a couple of years after the main mortgage) I am thinking of switching, our LTV is about 79/80% so I reckon we can definitely do better than what we are currently paying. We have about 140k outstanding on our mortgage with 20 years left to run.

However, I notice that in the terms and conditions of switching, one may have to change their mortgage protection insurance as well. We currently have level term cover, which means the amount insured is the original amount of the mortgage rather than a reducing balance and if one of us died, there would be a surplus after the mortgage was paid. We originally got the life insurance through our lender, but when they were taken over by NAMA, I believe the insurance became ours independently. In that case, would we be able to keep our existing MPI, with the level term cover?

Other than that, is it a lot of hassle to switch? Anything else I should be on the look out for? I am thinking of switching to a 5 year BOI fixed at 5% with 2% cashback on draw down and a further 1% in 5 years time

antix80

Mortgage protection policies can cost as little as €10 a month. It shouldn't be a consideration in your decision to change mortgage provider. It's separate to the mortgage.

ncmc

Ours is more than that as my husband has a pre existing illness. It is a consideration in our case as if one of us dies during the remaining terms of the mortgage, with our existing policy the remaining spouse would get an additional €50k from the payout. Look, hopefully it will never be an issue, but it is something to consider if we had to change policies.

antix80

In that case, make sure you keep that old policy! (nothing stopping you getting quotes for a new policy)

You need a life assurance policy like the one you have in order to take out a mortgage, but it's separate to the mortgage.