# What is a mortgage indemnity guarantee?

> Quick answer · Last updated 4 July 2026

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## In short

An insurance policy that protects the lender — not you — if they repossess and sell for less than you owe. It is usually required on high loan-to-value mortgages, and the premium may be charged to you as a lump sum or added to the loan.

A mortgage indemnity guarantee (MIG), also called a higher lending charge, insures the lender against loss if your home is repossessed and sold for less than the outstanding debt. It is common on loans above 90% or 95% loan-to-value, where the lender faces more risk that falling house prices will not cover the loan after repossession.

The insurance does not protect you — you remain liable for the full debt even after repossession, and any shortfall can be pursued. The premium might be a one-off fee of several hundred pounds or a percentage of the loan, either paid upfront or added to your mortgage balance where it attracts interest.

Not all high-LTV mortgages include a MIG; some lenders self-insure or price the risk into the interest rate instead. When comparing 95% deals for 2026/27, include arrangement fees, MIG costs and the interest rate together. Building equity through overpayments or rising values removes the need for similar charges when you remortgage at a lower LTV band.

## Related

- [What is LTV?](https://moneyguide.org.uk/answers/what-is-loan-to-value-ltv/)
- [Mortgages guide](https://moneyguide.org.uk/mortgages/)

## Primary source

gov.uk/buying-a-home/preparing-to-buy

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.