Survey targets lenders’ ethics
KENTISH GAZETTE - 18TH DECEMBER 2003
A recent survey by leading payment protection insurance broker Burgesses reveals that mortgage lenders are selling expensive and unsuitable mortgage payment protection insurance with their mortgages.
Posing as a potential customer Burgesses managing director, Simon Burgess, phoned the top 25 mortgage providers by sales volume to obtain a mortgage with mortgage payment protection insurance, which is designed to protect mortgage payments if you lose your job, fall ill or have an accident, which prevents you from working.
According to Burgesses, the average cost of mortgage payment protection insurance form the major lenders is £6 per £10, which is almost double that charged by independent providers.
The worst offers offered a premium of £7.70 per £100.
All 25 lenders failed to inform Mr Burgess that he could shop around for a better rate and save himself £3,075 over the lifetime of his mortgage.
A Council of Mortgage Lenders spokesman defended its members and said that most purchasers of mortgage payment protection insurance are happy and the relatively low take-up of mortgage payment protection insurance was due to customer’s reliance on other types of insurance such as critical illness and income payment protection insurance.
