Mortgages and cancer

Being diagnosed with cancer doesn’t mean that you can't get a mortgage. But a lender needs to know that you can pay back the loan. 

If you are worried about paying your mortgage, contact your lender as soon as possible. They must look at ways to help you. 

If you are looking for a new mortgage, it’s always a good idea to try a few different mortgage lenders. Explain your circumstances, so you can get the best advice and find the right deal for you.

Can you get a mortgage if you have cancer?

A cancer diagnosis doesn't mean that you can't get a mortgage. And a mortgage provider won't always ask about your health. But if you think paying a mortgage might be a problem due to your cancer then you should tell them.

The mortgage lender needs to know that you can pay back the loan, so they will ask questions about your income. If they see you have gaps in your earnings or a change to your income, they may be cautious about lending to you. 

You might want to get mortgage advice from a financial adviser.

Getting mortgage advice

Independent financial advisers can tell you about all the different mortgage products available. 

Restricted financial advisers can only tell you about certain products or mortgage providers. They must always tell you if they are tied to a particular company or agent. 

All independent and restricted financial advisers are regulated by the Financial Conduct Authority.

Ask your family and friends if they can recommend a trustworthy financial adviser. 

The different types of mortgage

The amount of money you can borrow depends on your ability to pay it back. The lenders will want to check your:

• income
• regular outgoings
• expenses
• age
• financial history
• security for the loan - which is your assets, or what you own

There are various types of mortgage including:

Repayment mortgages

Repayment mortgages are the most common type of mortgage. You pay off a bit of the loan as well as some interest every month. 

The rate of interest can vary over time. Most lenders also expect the mortgage to be repaid before you retire. Check with them or ask your financial advisor for more advice. 

Interest only mortgages 

With an interest only mortgage you just pay the interest each month. Then you have to pay off the entire loan at the end of the mortgage term. 

With an interest only mortgage, your monthly repayments will be lower. But your repayments won’t help you reduce your debt.

Flexible mortgages

Flexible mortgages let you:

• make overpayments
• make underpayments
• take a payment holiday
• make lump-sum withdrawals

This means you could pay your mortgage off early and save on interest.

Lifetime Mortgages (Equity Release)

These are mortgages only available to older people. Usually the minimum age is 55 and there is usually no maximum age. This is a very specialist mortgage and qualified financial advice is essential.

This mortgage doesn't have an end date. The loan and the interest is repaid after you have died or if you vacate your property.  An example of when you might vacate your property is if you move to a residential care home. You do not need to disclose your health when you apply for this type of mortgage.

You can make interest only payments. But it is more common that you make no repayments at all. Instead the interest is added to the mortgage and the debt will build up each year.

Not making any payments of the interest or capital will have an effect in the future. It is important that an adviser explains to you what it will be.

Insuring your loan

A mortgage lender won't generally ask you to give them your medical history. But the lender may want you to protect the loan with insurance. You will need to tell the insurer about any medical condition you have (or have had in the past).

Your lender may not insist you have insurance. But it really could be in your best interest to protect your loan this way. Talk to your financial adviser about it.

Check any life insurance or critical illness policies that you already have. They might already cover the full repayment of a mortgage if you die before it is paid off. Or you might be able to add this benefit to an existing policy by arranging to pay extra premiums.

And check any income protection insurance that you might already have. You’ll probably have to increase your premiums to cover your mortgage repayments.

Without insurance, you might find it very difficult to protect the loan. Suppose you had to stop working because of illness. You might not be able to keep up the repayments, and your mortgage lender would be able to repossess your house.

This is usually the last resort. But arranging some sort of insurance will avoid this situation.

As with all aspects of insurance, it’s best to ask a number of brokers, insurers and authorised financial advisers before you make a decision. You can get a list of potentially suitable insurers from the British Insurance Brokers Association (BIBA).

Mortgage payment protection insurance

Mortgage payment protection is a type of insurance policy. You pay monthly premiums. The policy then pays your mortgage repayments for up to 12 months if you become seriously ill or lose your job. It can vary though, so check with the insurance company. 

There are different types of mortgage payment protection depending on your needs. Generally you can get cover for:

• accident and sickness
• unemployment
• accident, sickness and unemployment

People who already have cancer might be able to take out this insurance. But it will depend on their type of cancer and the stage they have reached in its treatment. Check with a financial adviser for more advice. 

Guarantors

You might not be able to take out a mortgage yourself because of your illness. It may be possible to have someone act as a guarantor for you. This is someone who guarantees to pay your mortgage if you can't.

The guarantor might also have to arrange any necessary insurance. A suitable guarantor must have enough income to cover your mortgage and their own, if they have one. Your financial adviser, potential lender or insurance company will be able to explain the possibilities to you.

Financial difficulties and help with repayments

You are not obliged to tell your existing mortgage lender if you’re diagnosed with cancer. You don’t need to do anything as long as you can pay the mortgage as usual.

But your illness might make it harder for you to pay the mortgage. You might have to take time off work and this could make your income drop. You could then have trouble meeting your mortgage payments.

Tell your mortgage lender as soon as possible if you have financial difficulties. Or are worried about your repayments.

Mortgage lenders have a code of practice. It says they should be sympathetic if you have financial difficulties. They should try to find ways to help. That might mean reducing or stopping your payments for a short amount of time. 

Where to get advice

For advice and guidance on mortgages, the following organisations may be able to help. 

The Money Advice Service (Money Helper)
Helpline: 0800 138 7777 (Monday to Friday, 9am to 5pm)
This is an organisation set up by the government to give clear, unbiased money advice.

British Insurance Brokers' Association
Phone: 0370 950 1790
This is an association that can help you find an insurance broker.

Association of British Insurers
Phone: 020 7600 3333
For information about insurance, including different types of cover.