A waste of money
CHESTER EVENING LEADER - 17TH DECEMBER 2003
Another wheeze that costs you wasted money is mortgage payment protection insurance. Simon Burgess at brokers Burgesses says many lenders use mortgage payment protection insurance – protecting monthly repayments against unemployment, illness or accidents – as a ‘scam’ to boost profits.
Posing as a potential customer, Mur Burgess phoned 25 top lenders to obtain a mortgage with mortgage payment protection insurance and all failed to mention he could get a better rate for insurance cover elsewhere, possibly saving £3,000 during the lifetime of the mortgage.
Burgess says: “In the provision of mortgages, and insurance products linked to them, we need more transparency to show who actually makes the money. Prices are driven too high by irresponsible lending.
In France, lenders who lend more that three times income are not supported by the courts if the loan goes wrong. On mortgage payment protection insurance, however, commissions and over-riders to UK lenders exceeded 70% of premiums and could generate annual profits of nearly £1.5million.”
Keep shopping for the lowest loan rate,. Whatever, Professor Miles might suggest. And don’t forget there may be other savings that the lenders are unlikely to mention.
