Mortgage payment protection in north-south divide

Figures recently released by Communities and Local Government (CLG) confirm that the north-south divide is more apparent than ever when it comes to property prices. But it’s not only bricks and mortar where homeowners are paying differing amounts for similar properties - mortgage payment protection insurance (MPPI) premiums are determined by loan size, and this, says independent provider, British Insurance, is why consumers must shop around for their cover.

[ClickPress, Tue Jun 19 2007] Figures recently released by Communities and Local Government (CLG) confirm that the north-south divide is more apparent than ever when it comes to property prices. But it’s not only bricks and mortar where homeowners are paying differing amounts for similar properties - mortgage payment protection insurance (MPPI) premiums are determined by loan size, and this, says independent provider, British Insurance, is why consumers must shop around for their cover.

Managing Director Simon Burgess, explains: “The home insurance premiums for two terraced houses would not traditionall, vary that much, if say one was in the south east and the other in the north west. However, when it comes to mortgage protection, consumers in London and the south east could end up paying double that of other UK areas because of escalating house prices.”

According to CLG, the average house price in London is around £320,000, in the south east it’s £260,000, south west £220,000, east midlands £170,000, Yorks & Humber and the north west £160,000 and the north east £145,000. Average Scottish prices are £155,000, Northern Ireland £228,000 and Wales £162,000.

Simon continues: “Consumers are already having to dig deep financially to get on the housing ladder, so it’s a bit of a whammy when they have to fork out more for mortgage payment protection insurance as well. Lenders have a duty to make cover affordable for all, but sadly most High Street banks and building societies view the current housing situation as an opportunity to squeeze more money out of customers.”

British Insurance compared MPPI premiums of 10 of the UK’s top lenders and found that on average, consumers were spending two and a half times more than they needed to on this insurance.


The most expensive lender, Nationwide, was nearly three times higher. Consumers looking to protect mortgage repayments of £700 a month over 25 years would pay £10,000 more than is necessary with the Nationwide.


Simon comments: “Given these figures are based on a £100,000 mortgage, which in some areas wouldn’t meet half the cost of a home, I urge homeowners to review their payment protection premiums - especially if they’ve purchased cover from High Street ‘names’. I urge everyone to shop around; superior insurance with better rates is available.”



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Contact:

For further information or case studies, contact Simon Burgess, Managing Director at British Insurance on 07718 152635.


British Insurance regularly tops Which? and Defaqto’s ‘Best Buy’ tables. The company was awarded Mortgage Strategy magazine’s Best Insurance Distributor of the Year accolade in Feb 07, was recognised by Mortgage Introducer and What Mortgage as the 2007 Best Mortgage Payment Protection Insurance provider and received Mortgage magazine’s Best Insurance Broker Award for 2006.

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