What if I lose my job or get sick?

When you’re deciding how big a mortgage to apply for, it’s vital to consider how you will pay it if you become unemployed or too ill to work.

You might be able to rely on savings for a few months, but what would you do after that?

If you can’t keep up the payments, your mortgage lender can repossess your home.

If you’re out of work

State unemployment benefit is barely enough to cover basic necessities such as food, let alone pay a mortgage.

If you have an accident or fall ill...

You may be lucky enough to have a generous company sick pay scheme.

But your employer isn’t obliged to pay any more than the statutory rate of slightly over £70 a week for 28 weeks – and many don’t.

After that, if you’re still not fit to work, you will be eligible for Incapacity Benefit of around £80 a week.

If you’re self-employed, you will go straight onto this, starting on not much more than £60 for the first 28 weeks.

In either case

You will still face the problem of paying your mortgage, as state help is strictly limited.

To find out more, read Can I get state help with my mortgage?

That’s why, if you don’t already have insurance to cover your mortgage, you need to think about getting some.