Mortgage Protection Calculator

Work out how much life cover would clear your mortgage if the worst happened. Enter your balance, rate and term, then press Calculate to see the recommended payout and an illustrative premium.

Written by TopicDrill Editorial Team·Updated June 2026

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Cover versus mortgage balance

Policy cover Mortgage owed

How the mortgage protection calculator works

The tool first amortizes your mortgage to find what you still owe today and how that balance falls month by month. The recommended cover is set to the current balance, so a claim would leave the home mortgage-free for whoever you leave behind.

It then applies a simple cost model to estimate a premium. The rate per thousand dollars of cover rises with your age and the length of the term, climbs for smokers, and drops for decreasing term because the insurer’s exposure shrinks every year alongside the loan.

A worked example

Suppose you owe $280,000 at 6% with 25 years left, you are 38, a non-smoker, and you choose decreasing term. The recommended payout starts at $280,000 and the chart shows it gliding down toward zero as the mortgage is repaid. The estimated premium is a small fraction of your monthly mortgage payment, which is why this cover is popular with new homeowners on a budget.

Things to keep in mind

Treat the premium as a planning figure, not a binding quote. The policy term should match the years left on your mortgage, and if you switch to an interest-only deal you may need level cover instead. For impartial guidance on life cover, see the Consumer Financial Protection Bureau. To plan the loan itself, try our mortgage refinance calculator.

Frequently asked questions

What is mortgage protection insurance?

Mortgage protection insurance is a life policy whose payout is sized to clear your home loan if you die during the term. With decreasing term cover the payout falls in step with the amortizing balance, so the policy is cheaper than buying a fixed amount of level cover for the same loan.

How much cover do I actually need?

A common rule is to cover the outstanding mortgage balance so the home is paid off for your family. Some people add a cushion for funeral costs, legal fees or a few months of bills. This tool sets the recommended payout to your current balance, which is the figure most decreasing-term policies start from.

Is the premium shown here a real quote?

No. The premium is an illustrative estimate based on a simple model that scales with age, term, smoker status and cover type. Real underwriting looks at your health, occupation and medical history, so an actual quote from an insurer can be higher or lower.

Should I choose level or decreasing term cover?

Decreasing term tracks a repayment mortgage that shrinks over time and usually costs less. Level term keeps the payout fixed, which suits an interest-only mortgage where the balance never falls, or if you want the extra leftover lump sum to go to your family.

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