www.bestinsurance.co.uk has launched a new age-rated mortgage payment protection insurance for first-time buyers.
The trading style of British Insurance says younger applicants will benefit from cheaper premiums. It says many lenders offer a unified rate for their payment protection cover rather than being age-rated.
The firm says it could save clients 75 per cent on their cover, versus the average rates of the top ten lenders.
Product features include premiums from 95p in £100 of the monthly benefit, tax-free claims benefits payable from day one, fully portable between lenders and offers unemployment only, incapacity only or combined policies.
Managing director Simon Burgess says: “Our comparisons underline the importance of shopping around for this type of cover. Many young people are already struggling to meet their mortgage repayments and will not appreciate the burden of over-inflated premiums. A 25 year-old buying a policy with the most expensive lender will end up paying £11,430 more than necessary – even the cheapest lender’s policy results in a £5,940 over-spend.
“This is because of the over inflated commissions – often in excess of 80 per cent – that are taken by most mortgage lenders. In comparison we take a comparatively modest 20 per cent allowing 70 per cent to go into the fund to pay claims.”