Protecting your loans
THE MAIL ON SUNDAY - 11TH JULY 2004
One of the biggest worries for homeowners is how they would meet mortgage repayments if they became unemployed.
mortgage payment protection insurance is the traditional way to protect your home if you lose your income due to redundancy, illness or an accident. But buyers should be aware of the pitfalls.
For example, the cost of cover can vary greatly. Lender will usually offer their own mortgage payment protection insurance cover with a mortgage, but it will rarely be the cheapest.
The same is true of loan and credit card payment protection insurance often pushed by providers at the time of a loan or card sale.
Simon Burgess at Burgesses in Braintree, Essex, recommends homeowners and those with persona loans compare quotes from independent providers.
“Lenders take 80% of their insurance premiums in commission,” Burgess says, “Whereas most standalone providers take about 20%”.
Cover for monthly mortgage repayment of £600 starts at about £3.80 per £100 or £23.70 a month, according to independent website moneysupermarket.com. In comparison, the biggest lender, Halifax, charges £6.06 per £100 of cover or £36.36 a month, for similar cover.
