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&#39Switching MPPI could save £2,300&#39

The average mortgage borrower could save more than £2,300 during the term of their loan by switching their mortgage payment protection away from their lender, claims protection specialist DMS Security Plans.

Research conducted by DMS reveals that borrowers could save up to £95 a year by switching their MPPI policy from top lenders such as Abbey National, Barclays, Cheltenham & Gloucester and Woolwich to policies arranged by brokers such as DMS, Goodfellows or Paymentshield.

DMS compared the MPPI costs of some the UK&#39s top lenders. It found that the average monthly repayment on a £75,000 mortgage is £479 and the average MPPI rate is £5.84 a month per £100 of cover. As a result, it says an average borrower will pay £335.68 a year for MPPI or £8,392 over 25 years.

It says this compares with the average price for MPPI from a leading broker of £4.19 per £100 of monthly cover, meaning a borrower would pay £240.84 a year or £6,021 over 25 years, amounting to a saving of £2,371 over the mortgage term.

Director Martin Law says: “These substantial savings clearly demonstrate the opportunity for brokers to put an element of best advice back into the sale of MPPI and claim their share of annual commission exceeding £300m.”

British Insurance Brokers&#39 Association chief executive Mike Williams says: “Brokers provide policies that are better in price, cover and service than lenders and are able to dovetail MPPI into existing insurance arrangements to avoid duplication and unnecessary additional costs.”

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