A Mortgage Indemnity Guarantee (MIG) is an insurance policy that protects lenders if the mortgage repayments cease for some reason, perhaps due to death or a homeowner being made redundant at work. The MIG is NOT insurance protecting the borrower but is there to reduce the lender’s losses as a result of mortgage default.
MIGs are usually required when the borrower is taking out a mortgage with a relatively high Loan to Value (LTV) Ratio. Most mortgagees will levy a Higher Lending Charge, sometimes known as an MIG when the LTV is over 75%.
It is important to know that whilst the cost of the Mortgage Indemnity Guarantee is born by the borrower, the MIG is an insurance policy in favour of the lender. That said, without an MIG, lenders would not provide mortgages at such high LTVs, so most people are willing to pay this extra cost and obtain a larger mortgage with a smaller deposit requirement as a result.
Typically the charge for an MIG will be calculated at between 6 - 8% of the loan amount over 75% LTV. Although charges vary, most lenders will simply increase the interest rate offered in order to collect the fee, so the borrower doesn’t have to find a lump sum payment.
For more information, contact a mortgage adviser on 01628 507477.
Recent posts
Getting your home ready for Christmas
11 days ago
Everyone has their own traditions at Christmas time, but we have put this short blog together to help you get ready for the festive period ahead.
Budgeting Ideas for Talk Money Week
3 Nov 2023
Budgeting is an essential tool in managing finances. You can track your income and expenses, save money, and achieve goals.
Getting a mortgage when you are self-employed can be tricky, but it certainly isn’t impossible.
There isn’t such a thing as a “self-employed mortgage” - you will be applying for the same mortgages as anyone else. The main difference is you will be required to provide more evidence of a reliable income.
Stress-Busting Tips
25 Oct 2023
We have written a short blog of some stress busting ideas that you may want to put into practice, whether you're in the process of buying a property, or not, you may find these tips and techniques helpful.
Why have interest rates been increasing? when will they go down? And what does this mean for you?
We have created this short guide to provide self-care tips to support your physical and mental health.
Decorating Tips for Selling Your Property
13 Sep 2023
Selling up? It’s important to make your house as appealing as possible to potential buyers. Good decorating can help with first impressions, and increase the perceived value of your property.
More information
Trusted by
