Return to the Mortgage Glossary Home to view explanations for all mortgage terms. What follows is the definition for the term Mortgage Indemnity Premium as it relates to mortgages in the UK. Mortgage Indemnity PremiumIf the amount of money that you want to borrow with your mortgage is high relative to the value of the property (typically somewhere around 75-80% or higher) then the mortgage provider may demand a mortgage indemnity premium. Indemnity fees can be as much as 5-8% of the value of the loan, and are there to mitigate the risk to the mortgage provider of lending such a high amount. Some lenders do not charge a mortgage indemnity premium, and these are often the best deal for those with only a small deposit to put down against a home
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