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The high perceived cost of mortgage payment protection insurance (MPPI) puts too many consumers off from taking out cover, according to research by the charity Advice UK.
The study found that, while mortgages account for 83% of consumer borrowing, only 17% of that mortgage holders also take out MPPI.
In addition, the findings suggest that the MPPI offered by the big banks can be up to 70% more expensive than that available from specialised brokers.
Figures published by the Council of Mortgage Lenders (CML) also show that home repossessions rose by 70% cent in 2005 as against the previous year.
MPPI specialist Paymentcare has warned that consumer perceptions of the sector need to be addressed.
Spokesperson Shane Craig stated: "The situation gives cause for concern as so few homeowners have taken out any protection for their mortgages to cover them if they have an accident or are sick or lose their jobs."
"At present, all MPPI offerings look like they are being tarred with the same brush, as homeowners appear to take the view that cover is only available at rip off prices set by the major lenders".
Source:
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