Mortgage cover given a build-up

Cashing in on the fears of sudden job losses, financial services outfits have begun to prey on our anxieties.

AA Personal Finance advises homeowners to review their ability to repay mortgages amid growing fears of an economic downturn and the potential for redundancies.

More than eight out of 10 homeowners have no mortgage insurance. Anyone losing their job risks rising debt, as the state no longer guarantees cover for mortgage payments. Those who have taken out a mortgage in the past three years receive no financial help in their first nine months out of work.

The AA's freestanding Mort gageCare (0800-056-4397), not tied to any particular mortgage lender, guards against unforeseen job loss for around £16 a month to protect monthly repayments of around £400.

Only take out one of these policies if you believe that you will not be able to find work after more than a month's unemployment. Policy pay-outs are only triggered after 30 days of unemployment and last for 12 months or until taking up a new job, whichever is sooner.