Could your home survive a loss in income

If illness or injury prevented you from working, even for a few months, how would your mortgage be paid?

Most households have never had to test that scenario. Daily life is busy, and when the mortgage is being paid each month, it is easy to assume things would remain manageable. However, it is worth identifying where your financial weak points could be before you ever need to rely on them.

The Income Shock Many Homeowners Overlook

When considering financial risk, many homeowners focus on interest rates or property prices. Yet, the real vulnerability is often the monthly income that keeps everything moving.

If you are employed and become too unwell to work, you could be entitled to Statutory Sick Pay (SSP). As of early 2026, this is £118.75 per week, subject to eligibility, for up to 28 weeks[1]. While some employers offer generous sick pay arrangements, many do not.

Universal Credit could also be available depending on your circumstances. Currently, the standard monthly allowance is £400.14 for a single person aged 25 or over, and £628.10 for joint claimants where one or both are 25 or over[2]. While this support is helpful, it is not designed to replace a typical salary.

If your mortgage is £900, £1,200, or £1,500 a month, the gap between what comes in and what must go out becomes clear quickly.

The Mortgage Myth: Support for Mortgage Interest (SMI)

Many homeowners assume there is direct government help with mortgage payments if the worst happens. While a scheme called Support for Mortgage Interest (SMI) exists, it is often misunderstood[3].

SMI is not a benefit that pays your mortgage; it is a loan from the Government that could help towards the interest on eligible borrowing.

Key points to understand include:

• It does not cover the capital repayment element of a standard repayment mortgage.
• The amount is calculated using a government set standard interest rate, which as of February 2026 is 3.66%.
• The loan must be repaid, with interest, usually when you sell or transfer ownership of your home.
• Eligibility depends on receiving qualifying benefits and meeting specific criteria.

How Protection Insurance Could Help

Protection policies are designed to provide financial support if specific events occur, subject to the policy terms and conditions. For homeowners, cover generally falls into three categories:

1. Income Protection

This could pay a regular monthly benefit if you are unable to work due to illness or injury. The aim is to help replace part of your income so essentials, such as the mortgage, utilities, and childcare, can keep being paid.

2. Critical Illness Cover

This could pay a lump sum if you are diagnosed with one of the serious conditions defined in your policy. Families often use this to reduce the mortgage balance or create breathing space during recovery.

3. Life Insurance

This could pay out if you die during the policy term. It is important to check that your cover is large enough to make a difference and that the term matches your mortgage length.

A Simple “Stress Test” for Your Household

You do not need a spreadsheet to get a clear picture of your resilience. Ask yourself:

1. How many months could your savings cover the mortgage and essential bills?
2. What would your employer actually pay if you were signed off work?
3. If you died, could your partner remain in the home without being forced to sell?

If the answers are uncertain, that uncertainty is the risk. Taking time to understand how your mortgage would be paid if your income stopped is not pessimism; it is sensible planning.

Would you like us to help you assess your current protection or explore options from our comprehensive panel of lenders?

Contact us today to book an appointment with Kelly.