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Mortgage is paid off faster with mortgage insurance

Mortgage life insurance is not considered a mandatory type of insurance, but the policy helps reduce the interest rate on the loan and thereby decreases the financial burden of the borrower. If you wisely invest the money saved in this way into early repayment of the loan, you can repay it earlier and reduce the amount of overpayment, writes the news agency Banki.ru. We figured out how to do this, how much can be saved and how much faster you can repay the loan when getting mortgage insurance.
Mortgage is paid off faster with mortgage insurance

Mortgage insurance is usually designed to protect the lender (and partly the borrower) from loss if an insured event occurs, for example, if the borrower is unable to continue making loan payments due to illness or job loss.

Having insurance usually lowers your mortgage rate. Some banks offer lower mortgage interest rates if the borrower purchases insurance, as this reduces the bank's risk. A lower interest rate may allow you to pay more toward your principal, which will make it pay off faster.

According to the editors of Banki.ru, the savings on a mortgage loan of 5 million rubles (23.9 million tenge) for 40 years will range from 12,500 (59,850 tenge) to 21,250 rubles (101,787 tenge) per year. If a client gets the most affordable life insurance policy for 12,500 rubles (59,875 tenge), the total savings per year due to reduction in the interest rate minus the cost of insurance will be 32,176 rubles (154,123 tenge).

Source:  https://www.banki.ru/news/daytheme/?id=11001839

Photos are from open sources.

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