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Original poster

Mortgage - what happens to the house if I die

163 replies

Lessthenhe · 15/02/2025 12:19

What will happen to our house if I passed away?

Id just like to understand what will happen to our house if I were to pass away. I own the house with my wife and we have a £360k mortgage on a £600k house.

I cannot qualify for life insurance due to pre-existing conditions.

Would the bank demand immediate repayment of the outstanding mortgage? My wife is a lower earner so wouldn't be able to qualify for a mortgage.

I cannot qualify for life insurance due to pre-existing conditions. However, I have a death in service benefit with my employer.

Please no comments about that is a massive mortgage. I regret this but we have a 5 year fix that has recently started.

OP posts:
saveforthat · 15/02/2025 12:21

I'm surprised that your lender allowed you to take out the mortgage without life insurance. Have they taken a charge over the death in service benefit and does that cover the mortgage?

Original poster
Lessthenhe · 15/02/2025 12:23

saveforthat · 15/02/2025 12:21

I'm surprised that your lender allowed you to take out the mortgage without life insurance. Have they taken a charge over the death in service benefit and does that cover the mortgage?

As far as I know life insurance isn't required from the bank.
My mortgage broker spoke to me about getting life insurance and that's when I realised I wouldn't qualify.

OP posts:
saveforthat · 15/02/2025 12:24

Lessthenhe · 15/02/2025 12:23

As far as I know life insurance isn't required from the bank.
My mortgage broker spoke to me about getting life insurance and that's when I realised I wouldn't qualify.

Show quote history

I'm really surprised if that is true.

Interested in this thread?

Then you might like threads about this subject:

General money
2dogsandabudgie · 15/02/2025 12:24

I always thought that when someone got a mortgage it had to be tied in with a life insurance policy so that in the event if death the mortgage would be paid off. How much is your death in service benefit? Is that enough to pay off the mortgage if you were to die?

JanesLaundryAgain · 15/02/2025 12:25

saveforthat · 15/02/2025 12:24

I'm really surprised if that is true.

Show quote history

Well it is. 🤷‍♀️

BakedBeansforabrain · 15/02/2025 12:25

2dogsandabudgie · 15/02/2025 12:24

I always thought that when someone got a mortgage it had to be tied in with a life insurance policy so that in the event if death the mortgage would be paid off. How much is your death in service benefit? Is that enough to pay off the mortgage if you were to die?

It used to be linked , but not anymore

NoodleNuts · 15/02/2025 12:26

Life insurance isn't a requirement for getting a mortgage.

In the OP's example, the house would need to be sold and the mortgage repaid. If his wife was a higher earner, she could probably take our a mortgage in her own name or transfer the existing one but the OP says that would not be possible.

TouchOfSilverShampoo · 15/02/2025 12:26

None of what you're saying makes sense.

Did you even attempt to get life insurance or just assume you didn't qualify?

Does your death in service cover the outstanding loan?

What kind of broker did you use?

Rubybetsie · 15/02/2025 12:26

It's not a requirement to have life insurance for a mortgage. They recommend it but it's not compulsory. I've never had life insurance and had 3 mortgages.

FriendlyWerewolf · 15/02/2025 12:27

Rubybetsie · 15/02/2025 12:26

It's not a requirement to have life insurance for a mortgage. They recommend it but it's not compulsory. I've never had life insurance and had 3 mortgages.

Yes this. It's advised but definitely not compulsory.

WhoAmITodayThen · 15/02/2025 12:28

Surely, without life insurance, if you die a d are the only one on the mortgage, the bank would take possession/force a sale of the house to get gheir money.

Whatvdid ypu think would happen? That they would go, "OK, you are no longer paying this debt back, but we'll let Mrs Lessthanhe just live there indefinitely "

No.

CurbsideProphet · 15/02/2025 12:29

It would really be better to make an appointment with a financial advisor and go through everything with someone who is qualified to answer that question. At least then you would be able to make a plan for all eventualities.

SoSadForPoorDH · 15/02/2025 12:29

no life insurance is needed.

You say ‘we’ so is she jointly on the mortgage?
We were in the same situation, thankfully not a huge mortgage, but also no life insurance due to health issues. My options on DH’s death were to downsize to reduce mortgage payments that were more affordable or increase my earnings.
Thankfully I am, just about, managing the mortgage payments now.

She will possibly get bereavement support payment. I think my initial payment was £2,500 then it’s £100 a month for 12 months which does help a little. Could you sell and downsize now so that she isn’t left to deal with it on her own in the event of your death?

2dogsandabudgie · 15/02/2025 12:30

Your wife would be forced to sell the property so that the mortgage could be paid off if your death in service benefit did not cover it.

LadyMargaretPoledancer · 15/02/2025 12:30

Life insurance isn't mandatory for a mortgage.

Your wife would either need to take on the property herself or the bank would force a sale.

Out of curiosity what did you think might happen?

ExperiencedTeacher · 15/02/2025 12:30

I wasn't required to have life insurance for my mortgage. My death in service does cover the mortgage but this wasn't asked about by my lender.

If I were to die my house would be sold to repay the mortgage and leftover as well as death in service go to my children. My ex husband has his own house and children would be with him.

frozendaisy · 15/02/2025 12:32

You could look at an independent insurance broker and see if you can get some cover.

You need to speak to some financial experts.

Lovelysummerdays · 15/02/2025 12:34

How much would your death in service payment be for? What does your wife earn? I think the thing would be to not fall behind with the payments and have the property transferred to her at death, tenants in common I think?

There’s plenty of equity so the bank is pretty much guaranteed to get their money back. Assuming she kept up the repayments the bank wouldn’t move straight to repossession

Winter2020 · 15/02/2025 12:35

Would your wife be able to afford a mortgage if the amount of your death in service was paid off the house e.g. 360k minus death in service payment = remaining debt thst requires a mortgage.

Ultimately if your wife couldn't afford to get a mortgage after reducing the debt with your death in service then sooner or later she would have to give the house up as she can't afford to keep it and pay it off.

Nourishinghandcream · 15/02/2025 12:36

A few years now since we had a mortgage but having a life insurance in place was never a requirement (never had one and was never asked).

When I was a FTB I had an endowment mortgage with associated policy (and we know how they went!), mine was replaced with a repayment mortgage when I moved house 3yrs later (again no insurance requested) but I kept the endowment in the background (as it eventually turned out, it performed better than expected and after all the gloomy news, controversy etc, it gave me a very nice windfall).
Over the years I remortgaged and changed lenders (was very much a thing in the 90's/2k's) and insurance was never requested.

Organisedwannabe · 15/02/2025 12:37

If you’re signed up to a work pension scheme then you will probably have an in service death payment.

AnSolas · 15/02/2025 12:37

saveforthat · 15/02/2025 12:21

I'm surprised that your lender allowed you to take out the mortgage without life insurance. Have they taken a charge over the death in service benefit and does that cover the mortgage?

The banks can not not give a mortgage as the home (at point of sale) should always be worth more that the loan and the person have the ability to service it. It was ruled direct disability discrimination.

Insurance is a bolt on (up selling) originally used to protect wives who could not work due to children or social/ legal bar.

So on death the house is sold the loan repaid and the remaining money is first used to settle other outstanding loans or bills. Only once nobody is owed can money be passed on.

Lessthenhe you need to read your T&C as you both are separately and jointly liable for the whole amount. In theory if your death did not breach the contract and your wife could service the repayments on time and in full a court would not grant a reprosession order.

Original poster
Lessthenhe · 15/02/2025 12:37

TouchOfSilverShampoo · 15/02/2025 12:26

None of what you're saying makes sense.

Did you even attempt to get life insurance or just assume you didn't qualify?

Does your death in service cover the outstanding loan?

What kind of broker did you use?

I tried to get life insurance but couldn't qualify due to a pre-existing condition.

The death inservice benefit would cover the outstanding mortgage - my employer also employees to purchase extra coverage.

OP posts:
Eyesopenwideawake · 15/02/2025 12:37

The death in service benefit may well reduce the mortgage/repayments to a manageable amount and/or subsidise the payments; as long as the payments are being made the lender will not automatically re-underwrite the mortgage.

Anotherfrozenpizzafortea · 15/02/2025 12:38

saveforthat · 15/02/2025 12:24

I'm really surprised if that is true.

Show quote history

Life insurance has not been a requirement of a mortgage for at least 20 years, if not longer. Their money IS the house - if the mortgagee dies, the house is sold and the bank gets their money back.

Op if you die, would your death in service be enough to pay off the mortgage? Would your wife be able to make up any shortfall with a mortgage in her own right?

If not, then yes, the house would need to be sold to repay the mortgage.