View more on these topics

Moneynet warns of overpriced MPPI policies

Personal finance site moneynet has warned that many of the 2.5m homeowners that have mortgage payment protection insurance could be paying up to 33% more than they need to.

Moneynet claims that mortgage lenders are taking advantage of borrowers on the basis that most are ignorant of the fact that they can shop around for their MPPI.

Over 2,534,000 of UK homeowners now have MPPI (also known as ASU), a mortgage safety net in the event of a homeowner becoming redundant or suffering a serious illness or injury that keeps them away from work for a substantial period of time.

Take up rates for new policies is increasing – the Council of Mortgage Lenders reported that in 1998, 23% of new mortgages were taken out with this insurance; in the last 6 months of 2001, the figure had increased to 36%. However, premiums vary between the providers.

Richard Brown of moneynet says: “Just because a mortgage payment protection plan is one of the most expensive, it doesn&#39t mean you are getting a better level of cover. In fact, the only difference in 99% of the cases is how much commission goes into the provider&#39s pocket.

“It&#39s our belief that many of the mortgage lenders are taking advantage of people&#39s ignorance of the fact that they can shop around for their protection cover. In lots of cases, the product is sold alongside a new mortgage without the borrower giving it a second thought.

“People should be aware that they can shop around. If every policyholder switched to a lower cost policy, some £6bn could be saved nationally over the term of an average mortgage. It&#39s time this protection rip-off was highlighted to the consumer.”

Recommended

FSA clamps down on &#39rogue&#39 broker firms

The Financial Services Authority has acted to stop three firms of financial advisers from carrying on any activities regulated by the FSA.The firms – County Down-based Gallagher & Company, Gwent-based Allan Austin Investment Services (AAIS), and Bradford-based Midgley&#39s Insurance Mortgage & Pensions (MIMP) – have all been stripped of FSA authorisation after the financial regulator […]

Guardian/PAA deal means Unlimited leads

Professional Adviser Alliance members are now able to receive leads from 450,000 Guardian Unlimited visitors.Moneysupermarket.com has reached an agreement with The Guardian&#39s website, Guardian Unlimited, to provide mortgage, credit card and loan channels exclusively on Money Unlimited, the dedicated money section of the site.Money Unlimited receives 450,000 visitors a month. These will be able to […]

MyHomeMove launches remortgage service for IFAs

MyHomeMove Conveyancing has launched a remortgage service for IFAs and other mortgage advisers to offer their customers. Using streamlined processes for faster remortgage completions, the service enables IFAs to provide an enhanced level of customer service. The MyHomeMove Conveyancing re-mortgage service is £299 plus VAT and legal disbursements. Furthermore, IFAs will be paid £100 for […]

Packagers, make your voice heard

“In our book, there are only two things worse than a greedy packager. Being forced to use one. And being forced to pay their excessive and unregulated fees.” These words taken from Birmingham Midshires Solutions&#39 latest advert knocking mortgage packagers shows they sure know how to make friends and influence people.It&#39s pretty damning stuff and […]

Top seaside property hotspots revealed

Like to let beside the seaside? The latest research from LendInvest looks specifically at coastal towns to find which areas offer the top average rental yields to landlords. Where are the top seaside postcodes for landlords? The interactive map below looks at the highest rental yields along the UK coast. According to the data, Hull, […]

Newsletter

News and expert analysis straight to your inbox

Sign up