When interest rates rise those covered will receive payment of the difference between their existing mortgage and the increased rate they are required to pay.
Andy Shaw, director of Mortgage Rate Cover, said: “With interest rates likely to increase in the foreseeable future, and Moneyfacts reporting that mortgage arrangement fees have reached a 25 year high of £1,522, Mortgage Rate Cover is a valuable tool for brokers to offer.
“This insurance is unique in the market, can be applied to residential mortgages, buy to let portfolios and commercial loans, regardless of loan to value, loan to income, mortgage type or interest rate.”
Some 35% of UK mortgages were on a fixed rate in the third quarter of 2013 according to The Bank of England, meaning an estimated 7m borrowers are likely to have increased mortgage repayments when there is a rate rise.
Policies can be taken over 24 or 36 months online, while there are no credit checks or changes that need to be made to the customer’s existing mortgage.