Mortgage broker Paymentcare is calling for an end to single premium mortgage payment protection insurance (MPPI) policies, claiming they are "never in the client's best interest" owing to the interest accrued.
Managing director, Shane Craig, said that many consumers had confessed to wanting mortgage protection in the past, but were deterred from taking it because they thought they wouldn't be able to afford it.
However, he added that Paymentcare was convinced people were not being fully informed of the options available, stating that nobody would then "select a single premium policy over and above a monthly paid alternative".
With single premium products, "borrowers are sold a limited period of cover, usually five years, yet they pay for this over the whole term of their mortgage!" he said.
The firm pursued the matter with the Office of Fair Trading (OFT) in September last year, but was informed that the Department of Trade and Industry (DTI) had not yet decided to investigate the matter.
PPI is an optional form of insurance for mortgages or personal loans, covering the borrower in certain situations where they may be unable to keep up with loan repayments, including accidents or loss of work. To read more about mortgage news, click here.
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