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&#39Independents beat big lenders on loan cover&#39

Customers are paying a high price to insure their mortgage repayments, according to latest research from online insurance broker Rhino Insurance.

Its research shows that customers are paying an average £5.78 per £100 monthly benefit for mortgage payment protection through major lenders when they could be paying, on average, £3.95 by using an independent broker.

Rhino says protection for a loan of £115,000-£120,000 which would typically have a repayment of £650 a month costs £35.57 with most lenders.

By going to an independent broker, the borrower would pay just £25.68 a month and over 25 years, this could mean a saving of £3,567.

Rhino says if this saving is multiplied by the 2.3 million policyholders who have already taken out the payment protection insurance, this means a national saving of £8.2bn.

In a mystery shopper exercise, staff from Rhino app-roached 10 of the major mortgage lenders as customers to get a quote for mortgage repayment protection.

The results show that Cheltenham & Gloucester, Abbey National and Barclays are the three most expensive providers, with prices for mortgage payment protection ranging from £5.95 to £7.70.

Rhino Insurance director Andrew Areoff says: “Loyal customers are paying a very high price for apathy. Instead of shopping around for a better policy, they allow their lenders to provide a secondrate cover with grossly inf-lated premiums.”

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