Paymentcare.co.uk has advised that minor alterations to homeowners’ spending habits could lead them to afford to take out MPPI.
This follows on from the Sesame reports that two thirds of men won’t opt to take out MPPI, believing it is pointless. However 77 homes are repossessed each day, with the number of mortgages in arrears currently standing at 125,000 – meaning MPPI is still a wise investment.
Paymentcare.co.uk managing director, Shane Craig said: “Despite the ever-present spectre of repossession that can visit anyone with a mortgage, around three quarters of homeowners decide that their budget doesn’t stretch to include MPPI.
“But for the price of a few pints in the pub, borrowers could buy themselves the security of mortgage payment protection insurance and keep the repo man from knocking at their door, should their income dry up through sickness or unemployment.”
With the average new home loan now standing at £156,900, borrowers with a 25 year repayment loan at 5.75 per cent, for example, need to find £987 a month to service the debt.
Craig continued: “Borrowers may well be sceptical about the value of MPPI considering the cloud that is hanging over loan payment protection insurance whilst the issue is being thoroughly investigated by the Competition Commission, but the reality is that MPPI has never suffered from the same criticism faced by loan PPI and its inclusion in the Competition Commission investigation was questioned by many in the industry.”
According to the Council of Mortgage Lenders (CML), approximately £300 million a year is being paid via MPPI to borrowers in difficulty, with over 85 per cent of claims being paid.
