Home owners with variable-rate mortgages can now protect themselves against rate rises, with the first interest rate insurance policy. The product covers people with a variable rate or tracker mortgage against interest rate rises, and starts paying out automatically once policyholders' mortgage rate rises above a set level. The insurer suggests 7.5 million people are on a variable rate mortgage, or are set to come to the end of their fixed rate deal from the risk of rising interest rates. Protecting a £100,000 mortgage against a rate rise above 1 per cent will cost £1,032 for a two-year policy, equivalent to £43 a month. If the base rate and the borrower's standard variable rate then go up by more than the insured amount, MarketGuard will cover the difference. The product is taken out on a two-year term, and it is fully portable if people switch home or lender. There are also no redemption penalties or exit fees.
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