If you are considering taking out a mortgage after being diagnosed with hepatitis C, it is suggested that you take out either a repayment mortgage or an interest-only loan with a savings vehicle such as an ISA or a pension. Endowment mortgages require some kind of life insurance policy that will, at the least, be extremely expensive. In general, it is much easier to get repayment or interest-only mortgages from building societies than from banks. If you have a life insurance policy from before you were diagnosed, this can still be used to cover your mortgage loan without having to disclose your hepatitis C.
An endowment mortgage means that your monthly repayments consist of three components. One is the interest that you pay the mortgage provider; the second is a life insurance product should you die before you repay the mortgage; and the third component is a contribution towards an investment vehicle to pay off the remaining capital on your mortgage at the end of the mortgage term.
With a repayment mortgage, you make monthly payments on your mortgage that pays off both the capital and the interest. The capital is the lump sum that you have borrowed. With an interest-only mortgage, you only pay the interest but make payments into a savings scheme that will be used to pay off the capital at the end of the mortgage. Although you wont be required to take out life insurance, you should remember that, if you die before the mortgage is repaid, the lender will still want the money back. You may want to think about other ways to ensure your dependents do not have to sell the home in order to pay it off.
There is a particular type of life insurance product that you may be able to get to cover this. It is called decreasing term insurance and allows you to insure only for the term of the insurance and for the amount outstanding. Because both of these decrease over time as you either pay off the capital or save towards paying it off, the overall risk to the insurer and hence the likelihood of getting cover and the cost to you may be less than for a standard life assurance policy.
