A report released by Columbus today says a total £471m a year is being wasted by homeowners taking out protection direct from their mortgage lender.
It says the average homeowner in the UK is paying £689 a year per MPI policy when they could find cover for £400 if they shop around.
Columbus product director Rob Thomas says: “This is a bank robbery that’s hitting everyone. It’s a natural thought to turn to your bank or lender when looking at this kind of insurance but, at the same time, you’d expect them to be looking to provide you with a good deal.
“So, we’ve launched our own payment protection product to bring some equality to the market.
The study found Abbey to be the most expensive with an MPI annual premium of £763, closely followed by Woolwich on £714. Columbus’ new product bares a monthly premium of £36, or an annual premium of £432.