Mortgage Insurance Guarantee

This is called by several names, including Higher loan to value fees, Indemnity premium and Mortgage Guarantee
It all amounts to the same thing. Lenders don't like taking chances. They are quite happy to lend up to 75% of the value of your home as they consider your 25% stake is enough to cover them if things go wrong and they have to re-possess.

If you borrow more than this, they hedge their bets by taking out an insurance against you failing to pay the mortgage. They are the only ones to benefit from the policy, but the bad news is that you have to pay the premium, which is usually a single payment at the beginning of the mortgage. Quite often this is added to the loan and you pay interest on it.
Some Lenders have decided to fund the risk themselves and do not charge a premium, but may charge an interest surcharge at the beginning of the loan.

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