Mortgage payment protection insurance advice

Savvy Britons can save thousands of pounds on their mortgage payment protection insurance, experts have said.

However, millions of home buyers simply sign up to the policy offered to them by their mortgage lender - in an effort to save time.

"By the time they've been through their mortgage application process - which can be a lengthy ordeal, following increased regulatory requirements - clients may be tempted to sign up to the lender's own policy, just to save time," said Rachel McKay, mortgage analyst from financial comparison site Moneyfacts.co.uk.

"Consumers need to be made aware that shopping around for mortgage payment protection insurance cover, either direct or via their IFA, is an avenue that is well worth exploring. So by spending a little time at the mortgage application stage, they can save themselves a significant sum in the longer term."

This is especially true given the length of time people take to pay off a mortgage.

"There are now a number of independent sources offering a cheaper and wider range of product options, which can result in thousands of pounds being saved over the term of a mortgage," said Ms McKay.

"There is a mindset that needs to be broken, as whilst people are getting used to shopping around to save on car insurance, home insurance, utility providers and credit cards, they need to be made aware that there are alternative providers of mortgage payment protection insurance offering equal levels of cover but at a much reduced cost.

"New deals are evolving all the time and, as the table below illustrates, some of the newcomers to this field are offering solutions which are cheaper and more innovative than some of the established players."

She pointed to data from British Insurance.com, which estimates it can save people close to a third of the cost when compared against similar products offered by the top ten lenders.

"For anyone under the age of 40 the savings are pretty impressive, especially when you multiply the monthly saving by a factor of say 240 or 300 for mortgage terms of 20 or 25 years respectively," Ms McKay concluded.

To find a cheap UK mortgage, go to www.myfinances.co.uk/mortgages.htm