Mortgage Rate Cover has launched a new general insurance product underwritten by Focus Insurance Company Limited.

The product is designed to protect borrowers against increased mortgage repayments aligned to a rise in the Bank of England Base Rate (BoEBR) or three-month Sterling LIBOR (for Libor based mortgages).

Following an increase in interest rates, Mortgage Rate Cover policyholders receive payment of the difference between their existing mortgage payment and their increased payment amount, based upon the chosen policy excess, protecting them from potentially unaffordable increases that they may face.

he Bank of England PRA MLAR release for Q3 2013 reported that only 35% of all UK mortgages are on a fixed rate. Therefore, 65% – an estimated 7 million borrowers – are at risk of increased mortgage repayments when this rise occurs. Mortgage Rate Cover is designed to protect these borrowers by fixing or capping the payment borrowers make towards their mortgage repayments.

Brokers are being invited to register as a distributor of this product.

Andy Shaw, director at 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.

“Mortgage Rate Cover is easy to arrange. The 24 or 36 month policy is purchased online in minutes with payment made in full or in 10 monthly instalments. There are no credit checks or changes to be made to a customer’s existing mortgage, therefore making the policy quick, easy and totally unique.”