DH and I are buying our first house after renting. The mortgage is roughly 50% of our rent (rental prices are crazy round here and we're lucky enough to have a decent deposit), which is handy because I'm just about to give up work to have our first DC.
The mortgage broker wants us to buy income protection for around£50 a month. We're tightening our belts at the moment and that's a lot of money to us. I don't want to do it because:
- I'd rather save some money which we can use in case of any emergency, rather than spending money on something which might not happen
- We have a 50% deposit, so if it came to the worst we could sell the house, pay off the mortgage and move elsewhere.
- We have managed to find the rent every month, even during illness/ family tragedy etc., and don't think we will have difficult paying the mortgage for a short period in an emergency. Somehow, paying £600 a year for something that might not happen seems more wasteful.
Obviously, we are saving money on the mortage v. rent, but we'll also be making less money for at least a year while I stop earning.
AIBU to think that income protection a bit of a con, or am I being naive and is it actually a very good idea?