This group will also contain higher numbers of people who have had to convert from a repayment mortgage to an interest-only deal, perhaps due to financial difficulties.
This is so that it can be bought in connection with a repayment mortgage where the amount the individual wants to cover gradually reduces in line with the debt.
An interest-only mortgage offers a cheaper way to purchase a property than with a capital repayment mortgage, because borrowers are only paying off only the interest and not the capital.
The insurance company then calculates the annual rate at which the insurance coverage should decrease in order to mirror the value of the capital outstanding on the repayment mortgage.