MORTGAGE PROTECTION INSURANCE

great value mortgage protection insurance premiums from just £2.45 (per £100 of monthly benefit)

And back-to-day-one benefits (no excess periods)

Plus FREE COVER for all policyholders (including those who transfer from another provider)

Mortgage Payment Protection Insurance cover rip-off is exposed

Mortgage lenders are making up to 80pc in commission on the insurance borrowers take out to cover repayments. Almost three million people have mortgage payment protection insurance. But the huge commission charges mean insurance bought from lenders can cost almost twice as much as that available from brokers.

Borrowers are encouraged to have cover because people have taken out a mortgage since 1995 receive no state help with interest payments for the first nine months after losing their job. With a growing number of new borrowers taking out cover, the market is worth about £500 million. Many big lenders charge about £6 for every £100 of monthly payments. Insurance brokers and building societies generally charge less than the banks.

Nationwide’s policy for example, costs £4.99 per £100. Independent insurance broker Charcol charges £4.90 and Internet broker, Chameleon-Money, charges £3.95. One of the most expensive policies is from Cheltenham & Gloucester, which charges £7.70 per £100 for its cover.

To cover other household costs, it pays out more than your mortgage instalments, but starts only 60 days after you’ve been made redundant. If you can’t work because of illness or an accident, it pays out immediately says, Louise Nash of Chameleon-money insurance says: ‘Some companies are profit earning. Often they sell inappropriate policies such as unemployment cover for the self-employed and most policies are linked to the policy, rather than the individual, so if you have a serious illness you are locked in to your lender.’

She continues: ‘Greedy mortgage lenders are taking advantage because people take out cover at the same time as their mortgage without realising they can shop around.’ These deals usually insist that you have been unemployed full-time for at least six months before you can claim.

The policy typically continues only for a period of 12 months and starts to pay after a period of 30 or 60 days. However, some others policies make you wait for up to 120 days and the longer you are prepared to wait the cheaper the policy will tend to be. The cost for the UK’s top ten providers of this cover is detailed below:

If you are looking for more information on UK Mortgages or UK Loans for that matter then we recommend you try the site Loans UK, they cover a large variety of Loans and Mortgage products.