Mortgage Insurance

Mortgage insurance is usually required when a lender provides a loan that covers more than 80%* of the purchase price.

It is designed to cover the lender for their risk and protects them in the event that the property needs to be sold. If the lender suffers a loss on the sale, they claim payment from the mortgage insurance company. The insurer then pursues the borrower for the amount they paid the lender. The insurance offers the borrower no protection whatsoever and is a once off charge which can be added to the loan amount in certain

circumstances. The price of the premium depends on the loan to value ratio of the property purchased, which you will find on another Resources page in this section.