When a fixed mortgage deal is coming to an end, most homeowners want to know what rate is available and what their new monthly payment could be.
It can also be a useful time to check something else:
If illness or injury stopped you working, how would the mortgage and household bills be paid?
The answer will be different for everyone.
You may have employer sick pay, savings or another household income to rely on. You may already have life insurance, critical illness cover or income protection in place. Or you may find that losing one income would put pressure on the household quite quickly.
A mortgage review gives you a practical opportunity to check what protection you already have and whether it still suits your current circumstances.
Start With What You Already Have
Before considering any new protection, check what support is already available.
This could include:
- employer sick pay
- savings
- your partner’s income
- workplace benefits
- existing life insurance
- critical illness cover
- income protection
It is also worth looking at how long your household could manage if one income reduced or stopped.
For the 2026 to 2027 tax year, eligible employees can receive Statutory Sick Pay of £123.25 per week, or 80% of average weekly earnings if lower.
For many mortgage holders, this could leave a considerable gap between their normal income and the amount needed to meet the mortgage and other household costs.
What Is Income Protection?
Income protection is designed to provide a regular payment if illness or injury prevents you from working.
Policies usually include a waiting period, known as a deferred period, before payments begin. Common periods include 4, 13 or 26 weeks, or one year.
The right deferred period depends on your circumstances. Someone with generous employer sick pay may be able to arrange cover to start when that sick pay reduces or ends, while a self employed person with no employer sick pay may need payments to begin sooner.
Matching the deferred period to the support you already have can help avoid unnecessary overlap. A longer deferred period can also reduce the monthly premium, although this will depend on the policy.
It is also important to consider how much the policy pays, how long payments could continue and whether the monthly premium fits your budget.
What Is Critical Illness Cover?
Critical illness cover works differently.
It normally pays a lump sum if you are diagnosed with one of the serious illnesses covered by the policy and the diagnosis meets the insurer’s definition.
The money could be used to:
- reduce part of the mortgage
- help cover household costs
- pay for changes needed at home
- provide financial support during treatment or recovery
Policies vary, so it is important to understand which illnesses are covered, the definitions used and the conditions that apply.
Income Protection and Critical Illness Cover: What Is the Difference?
The two types of protection cover different financial risks.
Income protection is mainly designed to replace part of your income if illness or injury prevents you from working.
Critical illness cover normally provides a lump sum following a qualifying diagnosis.
Life insurance usually provides a lump sum following death, subject to the terms of the policy.
Some households may benefit from one type of cover while others may have a combination. The amount required will depend on your mortgage, income, savings, existing benefits, family circumstances and budget.
Why Review Protection When Your Mortgage Deal Ends?
A lot can change during a two, three or five year fixed mortgage period.
You might now:
- have children
- earn a different income
- work fewer or more hours
- have become self-employed
- have a larger mortgage
- have different household costs
- have changed employer benefits
Your financial position may also have improved through increased savings, a lower mortgage balance or better workplace benefits.
If your mortgage payment is likely to change, it can be useful to check whether the protection you arranged previously would still cover the level of household commitment you have now.
Reviewing protection does not automatically mean buying more insurance. Sometimes the result is simply confirming that the cover already in place remains appropriate.
Self Employed and Part Time Workers
Protection can be particularly worth considering when income depends directly on being able to work.
Cornwall has a relatively high proportion of self employed and part time workers.
For a self employed builder, tradesperson, hairdresser, consultant or small business owner, there may be no employer sick pay available.
Part time and seasonal workers may also have different employment benefits from somebody working full time for a larger organisation.
What matters is what happens to the household income if that person cannot work.
How Long Could Your Household Manage?
A useful exercise is to look at your normal monthly household costs and compare them with the income that would remain if you were unable to work.
Consider:
- mortgage payments
- utilities
- food
- childcare
- transport
- insurance
- other regular commitments
Then look at your available savings, sick pay and other household income.
A simple way to check your position is to compare your essential monthly outgoings with the income, sick pay and savings that would still be available.
If savings and employer benefits would comfortably cover a long period, your protection requirements could be lower.
If your income would stop quickly and the household has limited savings, the position could be quite different.
Understanding that shortfall can help you decide whether additional protection is worth considering.
Check Existing Policies Before Replacing Them
If you already have protection, do not assume an older policy should automatically be replaced.
Your age, health and circumstances when the original cover was arranged can be important.
Start by checking:
- how much cover you have
- how long the policy runs
- the monthly premium
- any deferred period
- what circumstances allow a claim
Once you know what you already have, it is easier to see whether there are any gaps.
Protection Needs to Be Affordable
Protection should also fit comfortably within the household budget.
The highest possible amount of cover is not necessarily the most appropriate. One household might want to concentrate on maintaining enough monthly income to continue paying the mortgage. Another might place more importance on having a lump sum available after a serious illness. Someone else may decide that their existing savings and employment benefits already provide enough support.
The right approach depends on the individual household.
Fixed Rate Ending Within the Next Six Months?
If your fixed mortgage rate is due to end within the next six months, you may already be starting to review your mortgage options.
While you have your income, mortgage and household figures available, it can also be worth checking your protection.
You might find that nothing needs changing. Or you may find that your existing cover would no longer provide enough financial support if you were unable to work or became seriously ill.
Ryan can review this with you, taking into account your mortgage, income, sick pay, savings, existing protection, household commitments and budget. Where further protection is needed, he can research suitable options and recommend cover based on your circumstances.
Mortgage Advice Center is based in Truro and advises clients across Cornwall and throughout the UK.
To discuss your mortgage and protection options, book an appointment online or call 01872 250190.
The information in this article is for general guidance only and does not constitute personal advice. Any recommendation will depend on your individual circumstances.
As with all insurance policies, terms, conditions, exclusions, eligibility criteria and policy definitions apply.
Your home may be repossessed if you do not keep up repayments on your mortgage.