Cover to protect against rate hikes

7 July 2008

Insurer MarketGuard has unveiled a protection product aimed at borrowers coming off fixed and variable rate deals this year.

The product, entitled Interest Rate Insurance, allows policyholders to choose their preferred rate excess. When the base rate and their SVRs rise above the excess, the deal automatically pays out.

Chris Taylor, chief executive officer of MarketGuard, says: "We believe this product will help bring stability to borrowers on variable rates or coming to the end of their fixed rate terms."

Simon Burgess, managing director of British Insurance, says: "At times like this firms need to be innovative and this product is innovative.

"I hope the cover is commensurate to the hype it is generating and that consumers will carefully consider if it is right for them."

A spokesman for John Charcol adds: "If you believe rates are going to shoot up there's some merit in taking out this product but we believe the opposite. Borrowers must seek professional advice before deciding if this is the right deal."

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