1 in 5 first time buyers are choosing mortgages for how long?

According to recent research from UK Finance, one in five first-time buyers are choosing mortgages for a term of 35 years.

Let's talk mortgages!

Mortgages are a hot topic at the moment, and for good reason.

Not only are they becoming increasingly harder to obtain, especially for young adults, but with the rising and falling interest rates, it can be hard to know where you're at with it all.

A staggering statistic

This recent research from UK Finance represents the current state of affairs with mortgages and first-time buyers.

The most recent figures from March showed 19% of first-time buyers signed up for 35-year or longer mortgages, an increase from 18% of buyers in February and 17% in January.

With young people choosing longer-term mortgages, it shows they're still in demand. But by choosing to get on the property ladder, young people are having to take a hit with the term length.

Why do interest rates keep rising?

Put simply, the main reason why interest rates always seem like they're on the rise is because of inflation.

What is inflation and why is it on the rise?

In a nutshell, inflation is the word used to describe rising prices in the country.

Also known as base rates, the rise in interest rates is all part of a bigger plan. By hiking interest rates, it makes it harder (and more expensive) for people to borrow money.

This in turn encourages people to save money, driving down the demand for goods and services, with the end goal of lowering inflation.

What mortgage do you have?

Just like there are different types of mortgages, there are also different types of mortgage protection policies. Here are the ones you need to know about:

• Decreasing term life insurance is the most popular type of mortgage protection, as it can cover the remaining balance of your repayment mortgage. There's a clue in the name with what a decreasing life insurance policy is - the amount of money you're covered for decreases over the term of your policy. It is designed to align with the balance of your mortgage as you pay it off.
  
  
• Level term mortgage life insurance is the other most popular type of mortgage protection policy you could choose. It differs from decreasing term life insurance in the sense that they're designed to cover different types of mortgages. A level term life insurance policy can cover your interest-only mortgage.

The biggest debt

If you have a mortgage, I’m sure you know all too well it’s probably the biggest debt you'll ever have in your life. So protecting it with a life insurance policy makes sense, right?

Without this cover in place, you could leave your loved ones with the burden of paying for the remainder of this debt after you're gone.

Why not calculate your costs?

Did you know that we have our very own mortgage insurance calculator?

If you want to find out what your policy could cost, and quickly, you need to try it out. In just 3 simple steps, our calculator can give you an estimate of what your cover could cost.

All you need to do is input your age, the amount you want covered, and the type of term you want (the choices are level or decreasing). Based on this information, our calculator will then provide an average cost.

Do you need life insurance to qualify for a mortgage?

In short, no!

Although taking out a mortgage protection policy is not a legal requirement, there are so many reasons why sorting your cover should be at the top of your list.

What is mortgage protection insurance?

This type of cover is there to act as a financial safety net that your loved ones can fall back on, if the unthinkable were to happen to you.

With this type of policy in place, the remaining balance of your mortgage will be financially protected by your cover.

How much is a mortgage protection policy?

Just like every home is different, so is every mortgage. Which means there is no one set cost for mortgage protection. Your policy will be based on several different factors, such as:

• Your age
• Your health and medical history
• Your job
• Whether you're a smoker or not (this includes vaping)
• The amount owed and the term

The above are just a few factors that'll be looked at when you take out life insurance. But always bear in mind that every policy is different, and you'll be asked several questions about your health and lifestyle.

Can you get critical illness insurance to cover your mortgage?

Protect your mortgage, and your future, with critical illness insurance. If you ever were to face a serious illness, this policy could really have your back.

Critical illness cover provides a lump-sum payout which could cover your mortgage payments when you can't work, take care of those daunting medical expenses, help you make necessary home modifications, offer supplementary income, and give you peace of mind during your recovery.

Don't let becoming critically ill jeopardise your home and finances. We can help you find the right critical illness insurance and stay financially secure.

Life insurance should be on your radar either way

One of the alternative's to having a mortgage is renting.

Renting suits so many people. It provides flexibility and freedom, allowing you to find a living situation that suits your needs without the long-term commitment of being a homeowner.

But just because you don’t have a mortgage, it doesn’t mean life insurance shouldn’t be on your radar. If you rent, you’ll still have monthly outgoings which could become a financial strain on your loved ones if the unexpected were to happen.

What we do

At Busy Bee, we know a thing or two about life insurance.

We have over 200 years combined experience in the life insurance industry, so like to think we know a thing or two about life insurance. Our experts can help to find the right policy to protect your mortgage.

With the right life insurance in place, you’ll have peace of mind that if the worst happened to you, your loved ones would not be left with the burden of paying off the remainder of such a huge debt.

Kick off your life insurance journey below, what are you waiting for?