Struggling mortgage holders that have “Restructured” warned that they may be leaving their families open to risk of 000’s in mortgage debt
Mortgage holders may be leaving their families open to thousands of Euro of legacy debt, when they switch
to interest-only repayments or restructure their mortgage. The most recent report from the Central Bank would suggest that this switch has become a common cost saving strategy, as the public attempt to deal with affordability issues in the current recession. This is according to Caledonian Life, who today said that up to 36 thousand* struggling mortgage holders have had to switch to interest-only repayment terms or otherwise restructured their mortgage since the recession began 3 years ago, but may not have adjusted their Mortgage Protection cover to reflect this change.
Greg Dyer Head of Sales and Marketing at Caledonian Life commented, “Many people have ceased to make capital repayments by switching to interest-only on their mortgage. This is totally understandable considering the considerable financial pressure people are under. However, they may not be aware or have simply forgotten that when they do this, their mortgage protection life cover also needs to be changed to a level term policy. A level term policy is for a set amount of cover and unlike regular Mortgage Protection cover, doesn’t decrease when capital payments on your mortgage have been suspended. With sufficient Level Term cover in place, an interest-only mortgage will be cleared should you die. Not a thought anyone likes to dwell on, but one that we need to be aware of to ensure our loved ones are financially protected.”