Transfer can pay off for borrowers
EASTERN DAILY EXPRESS - 18TH SEPTEMBER 2002
The average borrower can save £1,500 on the cost of mortgage payment protection insurance over the lifetime of a mortgage, according to a summary of two studies produced last week by magazines Mortgage Solutions and Personal Finance.
They show that by switching their mortgage payment protection insurance from their lender to a mortgage broker borrowers can save £5 on an average mortgage payment of £500 a month.
This equates to £1,500 over a typical 25-year mortgage.
Simon Burgess, managing director of insurance broker Burgesses, which produced the summary, said: “Surveys by Mortgage Solutions and Personal Finance compared the mortgage payment protection insurance policies of a number of lenders and brokers.
“They found the average cost from a lenders to be £5.95 per £100 of cover, compared with an average of £4.95 from the broker market. This means that borrowers going to a broker save £1 a month per £100 of cover, or £5 a month on an average mortgage payment of £500.”
Mr Burgess added: “The survey reveals the scandalous truth that lenders are creaming the public for every penny they can get.
“They are capitalising on the apathy of borrowers and benefiting form the fact that some borrowers may not realise they are entitled to shop around.”
But a spokesman for the Council of Mortgage Lenders, which represents the vast majority of UK lenders, said: “This boils down to a question of choice.
“Some people would prefer not to have the hassle of shopping around and are happy to get everything from one place. If people want to shop around they are free to do so.”
