Having mortgage protection insurance puts homeowners in an “ideal situation”

Homeowners should subscribe to mortgage protection insurance, particularly if they have a family to look after, according to Legal & General.

Mortgage protection insurance is often not a priority, with the insurance provider estimating that more people have mobile phone insurance.

In 2006, around 20 per cent of households had Mortgage Payment Protection Insurance (MPPI), according to research by the Association of British Insurers.

However, PR manager for protection at Legal & General Joe Wiggins advised that anyone with a mortgage should consider MPPI, which provides a monthly payment if people are unable to work due to an accident, unemployment or illness.

“Most people don’t fully appreciate that sick pay from an employer does not last that long,” Mr Wiggins said, adding that people could soon find themselves struggling to meet mortgage payments in the event of illness or unemployment.

Last week moneysupermarket.com advised homeowners to protect themselves against the effects of the credit crunch by taking out mortgage insurance.

Tags: Joe, family, Mortgage loan, MPPI, general mortgage, Association, moneysupermarket, mortgage payment protection insurance

Number of people driving with no insurance “extremely worrying”

Motorists driving without insurance should face stiffer penalties, states an expert website.

Statistics from Moneysupermarket.com revealed that up to one in seven motorists have driven their vehicles without any insurance coverage.

Further figures from the Motor Insurers’ Bureau (MIB) last year calculated that drivers without insurance were more likely to have been charged with drink driving by up to ten times.

Vehicles in the control of uninsured drivers were 6 times more likely to be deemed unsafe.

Deborah Williams, managing director of Confused.com, said the statistics were “extremely worrying”.

She is calling for more effective deterrents such as those introduced to combat mobile phone use while at the wheel.

“Perhaps more rigid penalties and greater education should be pursued for similarly dangerous offences such as speeding, driving without due care and attention, and for driving without insurance which is in essence, fraud,” added Mrs Williams.

Driving uninsured causes up to 160 deaths per year reveal MIB statistics.

Tags: rigid penalties, Insurance, driving without insurance, Technology Internet, Drunk driving, Moneysupermarket.com, moneysupermarket

Demand for five-year mortgages expected to grow

The number of homeowners looking for longer-term fixed mortgage deals is set to rocket, a leading bank has reported.

Research by Abbey Mortgage Index has shown that buyers seeking a fixed deal lasting five years have doubled in a month to 24 per cent.

The popularity of two-year fixed-term deals rose by just three per cent to 10 per cent.

This is in contrast to tracker mortgages which only five per cent of borrowers said they would opt for.

Nici Audhlam-Gardiner, director of Abbey Mortgages, said: “Recent reports about the shrinking mortgage market seem to have had a profound effect on borrowers.”

Abbey advised mortgage providers to prepare for a rush on longer term deals as borrowers seek stability amid the credit crunch.

The decrease in the availability of mortgage deals is guiding homeowners towards more lengthy mortgages suggests Ms Audhlam-Gardiner.

“Homeowners faced with a dwindling number of mortgage deals seem keener than ever to lock themselves into a deal for longer than two years such as a five-year fix,” she added.

Statistics by Moneysupermarket.com revealed that mortgage deals have decreased by 60 per cent compared to before the economic slowdown

Tags: slowdown, mortgage index, Business Finance, Nici Audhlam Gardiner, moneysupermarket, Nici

Hidden savings costs revealed

Easy access savings accounts can hold hidden charges for savers wishing to take out any of their money, it has emerged.

Consumers are urged to look at the small print of a savings deposit before entrusting their cash and laying themselves open to punitive measures, said Kevin Mountford, head of savings at moneysupermarket.com.

He commented: “It’s clear that some of these accounts deserve their place in the ‘easy access’ sector, but others should perhaps be categorised as ‘new notice accounts’.

“They do have a part to play in the market, but they are very much aimed at more disciplined savers. We know from experience that savers are different and save for different reasons.”

Mr Mountford added that savers should consider the details beyond the advertised rate and make sure they truly understand what they are signing up for.

Research from the website found that just four in ten of the highest interest-paying accounts give savers the chance to have unlimited access to their cash without losing any interest.

Tags: which, interest, highest interest-paying accounts, punitive measures, access savings accounts, different reasons, moneysupermarket, research

Credit card holders ‘wasting money’ on withdrawals

Consumers in the UK who use their credit cards in order to make cash withdrawals could find they are paying way over the odds in order to do so.

According to research from Moneysupermarket, Britons withdraw £8.3 billion using their credit cards annually – but they could be paying 27p per pound in interest and charges over the year.

The average amount paid across the major providers on one £20 withdrawal a month over the course of 12 months is 15 per cent, or £36.

“At a cost of up to 27p for every pound taken out, this is an exceptionally expensive way to spend,” said the price comparison site’s head of credit cards Rob Kenley.

“Wherever possible you should only withdraw cash from your current account, but we realise sometimes people face unexpected emergencies.”

A separate study from Abbey found recently that 23 per cent of credit card holders intend to consolidate different credit cards using one that offers a good value deal.

Tags: wasting money, card, unexpected emergencies, cent, wasting, 12 months, moneysupermarket, britons

Consumers should keep an eye on their savings rate

Consumers are being urged to keep an eye on their savings rate following the latest interest rate rise by the Bank of England.

Banks and building societies are often notoriously slow at applying any interest rate rises to savings account, yet are quick to apply them on borrowing, which means that they make maximum profits from any interest rate rises. The Bank of England has raised interest rates four times in the last nine months, taking them from 4.5% last August to 5.5% earlier this week. However, although borrowers quickly see repayments on variable rate loans and mortgages going up, savers do not benefit from the same speedy action.

In some cases, according to industry experts, banks and building societies simply leave the interest rate on savings unaltered, and most consumers fail to notice or concern themselves about this, leaving the banks to rake in million in additional profit.

Experts are urging consumers to keep on eye on their interest rates on savings every time the Bank of England imposes another interest rate rise, and to make sure that they either see the rate reflected on their savings account or consider switching accounts to one that does offer a competitive rate of interest.

Many of those with savings account may have to wait until June to see any rise in interest rates on their savings, and even this small delay could rake in huge profits for banks and building societies.

Kevin Mountford, head of savings and current accounts at moneysupermarket.com stated: ‘It takes providers an average of 20 days to pass on an interest rate rise. With each half per cent rise bringing in £12m per day in interest it’s easy to see why providers delay. If the reason for the average 20-day delay is operational then banks and building societies should backdate the rise.’

Tom Smith
21st May 2007

Tags: rise, switch, current, moneysupermarket, change