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21 March 2006
Property owners are running a risk by shunning mortgage payment protection policies, according to new claims.
Despite an increase of 70 per cent in repossessions in 2005, only 17 per cent of mortgage holders take out mortgage payment protection insurance (MPPI), leaving themselves vulnerable, says MPPI provider Paymentcare.
"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," said Shane Craig of Paymentcare.
"Advice UK has concluded that this is an 'unacceptable imbalance, as above all other loan commitments, mortgage repayments should be prioritised for protection,' – but it's perverse, when you consider the level of penetration that lenders achieve on the sales of single premium PPI for personal loans, compared to that of the level of sales for monthly paid MPPI products," he continued.
A report from charity Advice UK states that MPPI bought through mainstream lenders is up to 70 per cent more expensive than when bought through cheaper brokers, but this message is not getting through to the public, claims Paymentcare.
Figures from the Council of Mortgage Lenders show that the number of properties taken into possession in the second half of 2005 rose to 5,630 from 4,620 in the first half of the year.
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