Shop around for mortgage payment protection insurance call
FINANCIAL ADVISER - 12TH FEBRUARY 2004
Lenders are charging too much for mortgage payment protection insurance, according to an independent broker.
Burgesses, claimed that if borrowers shopped around they would realize they could get better deals elsewhere.
Simon Burgess, managing Director of Burgesses said rates were as much as £7.70 a month for every £100 of monthly payment from one of the big lenders.
This means that on a monthly mortgage payment of £500 a homeowner could be paying more than £38 a month in premiums. In addition, some of the providers insist on the customer paying a 60 day excess.
Mr Burgess said that if homeowners went through a good broker, they would be able to get a deal as low as £3.95 a month for each £100 - £19.75 a month on a £500 repayment.
Burgesses released its findings after conducting a survey with all the main lenders.
Staff from broker telephoned 25 mortgage providers to find out how much they were charging for payment protection cover, which protection individuals’ mortgage payments from illness and redundancy.
Mr Burgess said “There is great pressure put on people to buy cover from a lender, but they should shop around – mortgage borrowers are paying a significant price for apathy.”
A spokesman from the Council of Mortgage Lenders said, there are a range of prices in the market and plenty of choice for consumers. They need to shop around for the deal that best suits consumers”.
