£10,000 cost of bad-value mortgage insurance
Mortgage payment protection insurance from the UK's top lenders can cost up to £10,794 more than cheap insurance deals.
That is according to a study commissioned by British Insurance, which finds ten of the UK's major mortgage lenders were on average £7,119 more expensive for mortgage payment protection than cheaper insurance providers.
The study was based on a 30-year-old couple covering monthly payments of £700 on a 25-year mortgage. The most expensive lender was Nationwide, which charged £7.89 per £100 - equivalent to £16,569 over the full term of the mortgage.
"Research from the Royal Institution of Chartered Surveyors [Rics] reveals that house prices have risen for 17 consecutive months. Lenders obviously see this as the green light to follow price trends and inflate their MPPI [mortgage insurance] premiums accordingly," commented Simon Burgess, British Insurance managing director.
"You'd think that with the recent interest rate rises and first time buyers struggling to get a foothold on the property ladder, lenders would be sympathetic to the needs of their customers and help them protect their mortgage repayments with affordable cover."
He added: "This is another example of blatant profiteering at the expense of the consumer . . . I urge consumers to check their premiums. We all shop around for our home and motor cover, so why not mortgage repayments?"
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