A common method of mortgage repayment is known as "capital and interest."

Your monthly payment not only pays the interest due on the loan, but also a part of the capital balance outstanding. Your lender will calculate the payments due so that the mortgage will be paid off at the end of the term.

If you take the capital and interest route (also known as the repayment method) the mortgage lender will normally expect that, should you die before the mortgage is paid off, the outstanding capital balance will be repaid. You would not want to leave your family having to find mortgage repayments at a time when they could be struggling financially without your income to support them.

An affordable method of protecting against this eventuality is Mortgage Temporary Assurance. It will pay out a lump sum if you die during the policy term. The initial level of cover will be the same as the amount of your outstanding capital and interest (repayment) mortgage. The amount of cover will reduce each month to reflect the lower amount outstanding on your mortgage. (The reduction is not based on your own mortgage but assumes that the mortgage interest is fixed at 9% throughout the whole term). This could allow your family to continue to live in the family home without the worry of the mortgage payments to find.

It's important to note that if your mortgage rates are lower than 9% during the policy term, then the cover could provide more than is needed to pay off your mortgage. But if your mortgage interest rates exceed 9% at any time, the cover might not be enough to repay the whole of your mortgage.

Example costs for £100,000 cover for 25 years (accepted on standard rates). These figures are estimates only, the actual premium will depend on your individual circumstances.

NFU Mutual Financial Consultants can advise you on the length of cover you need and recommend an appropriate amount of cover, dependent on your current circumstances.

NFU Mutual Financial Consultants and Telephone Advisors advise on NFU Mutual's products and services and in special circumstances those of other providers.

You can incorporate Critical Illness cover on your policy which means that we would pay out in the event of death or a specified critical illness.

If your mortgage is not 'capital and interest', you should speak to a Financial Consultant to find out what type of cover is most appropriate for your particular mortgage. Contact us to speak to a Financial Consultant.