The Ultimate Guide to Mortgage Protection Insurance in Ireland - 2026 Edition

The Ultimate Guide to Mortgage Protection Insurance in Ireland - 2026 Edition

Getting a mortgage in Ireland? Then you need mortgage protection insurance. It's not optional, it's not negotiable, and it's one of the first things your lender will ask about.

But here's what most first-time buyers don't realise: you have choices. The decisions you make can either save you thousands or lock you into expensive, inflexible cover that might not even work the way you think.

This guide breaks down everything you need to know about mortgage protection insurance in Ireland.

What Is Mortgage Protection Insurance?

Mortgage protection is a type of life insurance that's compulsory when you take out a mortgage in Ireland. If you die before your mortgage is paid off, the insurance pays the outstanding balance to your lender. Your family keeps the house without inheriting mortgage debt.

Unlike regular life insurance which pays a fixed amount, mortgage protection is "decreasing term" cover. The payout reduces as you pay down your mortgage. Start with €300,000 cover, and ten years later when your mortgage is €220,000, that's what the policy pays.

This decreasing structure is why mortgage protection costs less than level term life insurance - you're paying for less cover each year, though your premium stays fixed.

Is It Compulsory?

Yes - for almost everyone buying a residential property with a mortgage in Ireland. The Consumer Credit Act 1995 requires it. No mortgage protection = no mortgage drawdown = no keys.

Exceptions:

• Over 50-55 (varies by lender) - some waive the requirement
• Can't get cover due to serious health issues - discretionary, not automatic
• Buy-to-let mortgages - usually exempt
• Adequate existing life insurance - must cover full amount and term

For everyone else buying their home, it's mandatory.

The Three Types of Cover

Single Life

One person, one policy. If you die, mortgage is paid. Simplest, cheapest option if buying alone.

Joint Life

Covers two people but pays out only once. First person dies, mortgage clears, policy ends. Survivor has no further cover. Most common for married couples.

Dual Life

Covers two people, can pay out twice. First death clears mortgage, policy continues. Second death triggers another payout. More expensive but crucial for unmarried couples avoiding inheritance tax.

What Affects the Cost?

Age - 30-year-old pays far less than 45-year-old. Premiums increase 5-8% per year of age.

Smoking - Smokers (including vapers) pay 50-75% more. Need 12 months smoke-free for non-smoker rates.

Mortgage amount - Higher mortgage = higher premium.

Term length - 35-year term costs more than 25-year.

Health - Pre-existing conditions increase premiums or require exclusions. Answer health questions honestly - non-disclosure voids your policy.

Occupation - Higher risk jobs (construction, manual trades) cost more.

Premiums are fixed for life - once locked in, they never increase unless you change your cover.

You Don't have to Buy from Your Bank

This is the biggest money-saving tip: don't buy from your bank.

Banks are tied agents - AIB, EBS, PTSB, BOI can only sell from one insurer. You're not getting market quotes.

You'll overpay - Bank prices are often 15-25% higher than broker prices for identical cover.

Block policies - If you switch your mortgage, they cancel your policy. You reapply at new age and health - potentially paying far more.

Limited advice - Bank staff are salespeople, not independent advisors.

By law, you're free to buy anywhere. Your bank cannot force you to buy from them.

When Should You Apply?

Ideal: 4-6 weeks before drawdown.

Gives time for medical underwriting, GP reports (2-4 weeks), and no last-minute stress.

Don't apply too early - Health changes before drawdown must be disclosed.

Don't leave it late - Week before drawdown leaves no buffer for delays.

Best timing: Once you're sale agreed with mortgage approval in principle.

Can You Use Life Insurance Instead?

Yes - if it covers the full mortgage amount, term matches, and can be assigned to your lender.

But most people don't need expensive life insurance for their mortgage. Basic decreasing term mortgage protection is all that's legally required.

Want your family to inherit money beyond a mortgage-free home? Combine mortgage protection with separate life insurance rather than using one large policy.

Should You Add Serious Illness Cover?

Banks push serious illness cover as an add-on. Be careful.

If added to mortgage protection and you claim, the payout goes to the bank, not you. Diagnosed with cancer, policy pays €100,000, lender clears mortgage. You get nothing for medical bills.

Want serious illness cover? Consider taking it as a separate policy. Then claim money is yours for medical costs, mortgage payments, time off - whatever you need.

What About Income Protection?

Here's what mortgage advisors won't tell you: income protection is often more important than mortgage protection.

Mortgage protection pays if you die. Income protection pays if you can't work due to illness - far more likely.

You're more likely to be off work 6 months with injury, depression, or illness than to die during your mortgage term. Income protection replaces up to 75% of salary, letting you keep paying everything while recovering.

Premiums qualify for tax relief at your marginal rate - 20% or 40% back.

Special Note for Unmarried Couples

Buying with a partner you're not married to? Standard joint life creates massive inheritance tax problems.

CAT means unmarried partners pay 33% tax on anything over €20,000 inherited. Joint life cover creates tax bills of €50,000-€100,000+.

Solution: Two "life of another" policies structured correctly. Tax savings are enormous - read our full guide for unmarried couples.

How to Get the Best Deal

Get quotes from all five insurers - Aviva, Irish Life, New Ireland, Royal London, Zurich. Not just your bank's quote.

Use a broker - Access to all insurers, know which suits your profile, typically free (insurer-paid commission).

Be completely honest - Non-disclosure is the top reason claims get reduced or refused.

Understand what you're buying - Single vs joint vs dual, with or without add-ons.

Get it sorted early - Don't wait until you're stressed about drawdown.

Common Mistakes to Avoid

Buying from your bank without comparing - Overpay by hundreds yearly

Joint life when unmarried - Creates massive tax bills

Adding serious illness to mortgage protection - Payout goes to bank, not you

Not disclosing health issues - Voids your policy when needed

Last minute applications - Medical reports take time

Assuming all policies are identical - Features and terms vary significantly

The Bottom Line

Mortgage protection is compulsory, but that doesn't mean overpaying or buying wrong cover.

Shop around, understand options, get independent advice, structure properly. Hours invested doing this right save thousands over your mortgage term - and potentially save your family from financial disaster.

Your home is your biggest commitment. Make sure mortgage protection actually protects your family without costing more than necessary.

Ready to Get Sorted?

Don't overpay or rush into wrong cover. Get personalised quotes from Ireland's five leading insurers.

Get Your Free Mortgage Protection Quote →

QuoteLeader compares all five Irish insurers based on your age, health, and circumstances. We'll show you what you'll pay, explain options clearly, and help you get right cover before drawdown.

Or speak with our experts: Call us on 01 539 44 50 for straightforward advice on mortgage protection.

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