Mortgage protection calculator
Estimate your mortgage protection needs and compare level term (sum assured stays constant) against decreasing term (sum assured reduces roughly in line with a repayment mortgage). Both types have their place depending on your mortgage and broader needs.
Used to model the decreasing term schedule.
Assumptions and methodology
Lump sum need = outstanding mortgage + other debts + desired additional support − existing cover − savings. The decreasing term schedule uses standard mortgage amortisation: B(n) = P × [(1+i)^N − (1+i)^n] / [(1+i)^N − 1]. An assumed coverage rate slightly above the mortgage rate is applied to ensure cover stays above the outstanding balance.
Common mistakes to avoid
- ✕Choosing a joint life policy that only pays once — consider two single-life policies for broader protection.
- ✕Under-buying the term — check it at least covers the full remaining mortgage term.
- ✕Not considering interest-only mortgages — the balance does not reduce, so decreasing term may not be appropriate.
Frequently asked questions
Level term keeps the sum assured constant throughout the policy. Decreasing term reduces the sum assured over time, roughly following a repayment mortgage balance. Level term is usually more expensive but provides broader protection.
Level term is generally more appropriate for interest-only mortgages, as the outstanding balance does not reduce. Decreasing term is designed for repayment mortgages.
No. No UK lender can legally require mortgage protection insurance as a condition of a mortgage. However, it is often strongly recommended if you have dependants who rely on your income.
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Disclaimer
This is a simplified estimate based on the assumptions shown above. It isn't a quote, and a real insurer may arrive at a different figure. Use it as a starting point, then check the details with your insurer or adviser.