which insurance/assurance do I need to cover interest only mortgage?

apples1

We have switched our mortgage from repayment to interest only for a few years as cannot afford repayments whilst only one decent salary coming in (I'm Mummy at the moment!).

We did not change our mortgage insurance/assurance (not sure what its called) policy so are still paying for decreasing term policy although we are not making any capital repayments on our mortgage now. Which type of cover should I be searching for - level termassurance or mortage life cover??? I just want cheapest possible policy that would pay off mortgage if either my husband or myself were to die.

regularsaver1

level term so cover does not decrease

i don't want to sound patrionising, but do you have anything in place as an investment plan to back your mortgage enabling you change to interest only? and will it really help your situation in a few years

dunstonh

level term assurance (as mentioned) or pension term assurance can be the best options. Which of the two depends on age, term, tax position and companies you get quotes on.

apples1

Thanks for both replies. I thought it would be level term I needed even tho it is for mortgage cover.

regularsaver1 wrote:

i don't want to sound patrionising, but do you have anything in place as an investment plan to back your mortgage enabling you change to interest only? and will it really help your situation in a few years

Nationwide offer this option as long as you have a low loan to value. I do appreciate its not ideal and if i could afford an investment plan then I wouldn't have stopped the capital repayments. At the end of the day it was that or sell (either to buy small or rent). We want to stay for various personal reasons and in a few years we will either return to repayment mortgage or sell. At the moment the house is rising in value - up over £80k in last year or so and for us its like paying rent whilst still (hopefully!) benefiting from staying on the property ladder.

Wish we could afford the extra but we just cannot. We have a very tight budget and we are sticking to it like glue!

apples1

Where is the best starting place to shop around for these policies?