The term mortgage insurance gets used loosely to describe several quite different products. Knowing which is which stops you buying something you do not need or skipping something you genuinely should have.\n\nMortgage Indemnity Guarantee (MIG) — This protects the lender, not you. If you borrow at a high LTV (typically above 75–80%), some lenders take out an insurance policy to cover their risk. You might be asked to pay for it, even though it offers you zero protection. If you default and the property is sold at a loss, the insurer pays the lender, then the insurer comes after you for the shortfall. MIG was common in the 1990s. Most modern lenders absorb this cost themselves or simply charge a higher interest rate for high LTV lending.\n\nPayment Protection Insurance (PPI) — PPI was designed to cover your mortgage payments if you were unable to work due to illness, injury, or redundancy. In theory, a sensible product. In practice, it was catastrophically mis-sold. Banks added PPI to mortgage products without explaining it, sold it to people who could never claim (self-employed, those with pre-existing conditions), and charged excessive premiums. The resulting scandal led to over 38 billion pounds in compensation. The claim deadline passed in August 2019.\n\nMortgage Payment Protection Insurance (MPPI) — This is the modern, properly regulated version of PPI. It covers your monthly mortgage payments for a set period (usually 12 or 24 months) if you cannot work due to accident, sickness, or involuntary redundancy. Premiums depend on your monthly mortgage payment and the waiting period you choose. A 30-day waiting period is cheaper than an immediate-start policy.\n\nDo You Need MPPI — It depends on your circumstances. If your employer offers generous sick pay (six months at full pay is common in the public sector), you might not need it. If you are self-employed with no sick pay at all, it could be essential. Income protection insurance is often a better alternative because it covers your entire income rather than just the mortgage payment, and it can pay out until retirement rather than for just 12 months.\n\nBuildings Insurance — This is the one form of mortgage insurance that is genuinely compulsory. Your lender requires you to have buildings insurance from the day of completion. It covers the cost of rebuilding your home if it is destroyed or damaged by fire, flood, storm, or subsidence. The rebuild cost is not the same as the market value. Check your home's rebuild cost using the RICS Building Cost Information Service calculator.