Rates verified 5 May 2026 against regulated industry sources. (See full methodology.)
Decreasing term · Level term · Joint cover · Mortgage clearance · Pence-precision maths
This calculator estimates the life cover needed to clear your mortgage. It's a starting point — not personalised financial advice. For advice tailored to your circumstances, consult an FCA-regulated financial adviser.
Estimate based on your inputs. Not a quote, not a recommendation, not regulated advice.
Step 1 — Mortgage details
Capital and interest mortgages reduce the outstanding balance over time. Interest-only stays at full amount for the term.
Step 2 — Cover preferences
Step 3 — Existing protections
Used only to calculate the value of your death-in-service benefit.
Step 4 — Decreasing term shape
A decreasing term policy reduces over the policy term to roughly match a capital-and-interest mortgage. The shape of decline depends on the assumed interest rate.
Recommended cover
£200,000 (decreasing) or £200,000 (level term)
Over 25 years to match your mortgage
Estimate only. Actual cover and premiums depend on your health, lifestyle, and provider.
Decreasing term cover
£200,000
~£14–£26/mo · matches C&I mortgage
Level term cover
£200,000
~£20–£40/mo · matches interest-only / BTL
Existing cover applied
£0
Gap: £200,000
Decreasing vs level term — year-by-year
Year
Decreasing cover
Level cover
0
£200,000
£200,000
5
£177,160
£200,000
10
£147,849
£200,000
15
£110,232
£200,000
20
£61,956
£200,000
25
£0
£0
Decreasing falls in line with the mortgage; level stays constant for the full term and then ends.
Cover vs mortgage balance
This is a starting point for conversations with a broker. Actual cover needs and premiums depend on health history, smoker status, employer benefits, and personal circumstances. Take this number to an FCA-regulated adviser for a tailored recommendation.
Decreasing term vs level term life insurance for mortgage protection
Decreasing term life insurance has a sum assured that falls each year, designed to mirror a capital-and-interest mortgage as the outstanding balance reduces. Premiums are typically 30–40% lower than level term for the same starting cover because the insurer's exposure shrinks over the policy term. Level term keeps the sum assured constant for the full term — this overinsures a C&I mortgage but is the right product for interest-only mortgages, buy-to-let lending, or anyone who wants the surplus to pass to dependants. The cheapest option for most homeowners is a decreasing term policy matched to the mortgage term — but it only clears the debt and doesn't help dependants beyond that. Pair this calculator with the Mortgage Affordability Calculator and the Mortgage Overpayment Calculator to model how reducing the loan changes the cover you need.
Should I write mortgage life insurance in trust?
Writing a life insurance policy in trust means the payout sits outside your estate for inheritance tax purposes. For most mortgage life cover this matters less because the estate is likely under the £325,000 nil-rate band including the property — but it's a free administrative step at policy setup that prevents the payout being used to pay debts of the deceased's estate (other than the mortgage). The payout goes directly to beneficiaries via the trust, faster than probate. Use our Inheritance Tax Calculator to model your full estate exposure and decide whether trust setup is worthwhile for your circumstances.
Joint mortgage cover vs two single policies
Joint life first death pays out once, on the first death of either applicant. It saves money — typically ~30% vs two single-life policies — but provides only one payout. For mortgages with two applicants this is often sufficient: the surviving partner gets the property cleared and they continue. Two single-life policies pay out on each death — useful if there's significant remaining wealth to pass to children, but unnecessary if the only goal is mortgage clearance. If your needs extend beyond the loan, the Life Insurance Needs Calculator sizes up income replacement, childcare, and final expenses on top of the mortgage figure.
Frequently asked questions
How much mortgage life insurance do I need?
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Enough to clear your remaining mortgage balance if you die during the policy term. For a capital and interest mortgage that means a decreasing term policy starting at your current outstanding balance and reducing roughly in line with the loan. For interest-only mortgages, including most buy-to-let lending, you need level term cover at the full balance for the full term. Many UK households also include a margin of 10–20% for early repayment charges, legal fees, and a small buffer for the surviving partner.
What's the difference between decreasing term and level term life insurance?
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Decreasing term and level term differ in how the sum assured changes over time: decreasing term falls each year to mirror a capital-and-interest mortgage as the balance reduces, with premiums typically 30–40% lower than level term because the insurer's exposure shrinks. Level term keeps the sum assured constant for the full policy term — this overinsures a C&I mortgage but is the right choice for interest-only loans, buy-to-let, or anyone who wants any surplus to pass to dependants beyond clearing the debt.
Is mortgage life insurance the same as my lender's MPI?
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No — they solve different problems and are not substitutes. Mortgage Payment Protection Insurance (MPPI or MPI) sold by lenders typically covers monthly mortgage payments for a limited time (usually 12 months) on accident, sickness, or unemployment; it is not life insurance. Mortgage life cover is a long-term life policy that pays a lump sum to clear the loan if you die during the term. Many homeowners need both depending on circumstances.
Should I get mortgage cover or general life insurance?
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If your only protection goal is to clear the mortgage so the property passes to dependants debt-free, decreasing term mortgage cover is usually the cheapest fit. If you want to provide ongoing income for a partner, fund childcare, or replace earnings until children leave home, broader life insurance sized via a needs analysis is more appropriate. Many UK households layer both: decreasing term to clear the mortgage plus a smaller level term policy for the family's ongoing needs.
Will my employer's death-in-service cover my mortgage?
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Employer death-in-service benefit (typically 2–4× salary) is often enough to clear a mid-sized mortgage. But it stops the day you leave the employer for any reason — resignation, redundancy, or retirement. Buying your own mortgage life cover means the protection follows you between jobs, which is critical for anyone who might change employers during the policy term. Most advisers recommend treating death-in-service as a useful extra rather than a substitute for owned cover.
How much does mortgage life insurance cost per month?
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For a healthy 38-year-old non-smoker, a £200,000 25-year decreasing term policy typically costs £8–£15 per month. The same £200,000 25-year level term costs £10–£20 per month. Premiums rise sharply with age, smoking status, and health history — by age 50 the same policy can cost 3–5× more, so buying earlier is materially cheaper. Joint life first death policies are typically ~30% cheaper than two single-life policies.
Calcsmith provides estimates based on the information you enter. This is a needs estimate, not a quote, recommendation, or regulated financial advice. Consult an FCA-regulated financial adviser for personalised guidance.