Mortgage Question ?

mumstheword_4

I am currently remorgaging I have been advised by the provider that if I dont take out their house & contents insurance they will charge me £35.00. Now is this legal? - They dont have any admin charges if I dont take out insurance so how come they can charge me not to do it? - I would have thought this is anticompetitive practice - does any one know the legal position on this one?

herbiesjp

Yes it is legal

It should show up as one of the fees you received on the illustration either via the broker or direct from the lender

MortgageMamma

HI There

It is quite common for a lender to charge you a fee if you choose to take out buildings cover with another company. This is because the lender has to assess the policy that it offers a suitable level of cover, as the property is their main security for the loan they want to ensure its adequately insured. They also don't like not being able to sell more than just the mortgage and I expect they think it prevents people shopping around. Lender insurances are not always the cheapest so it does pay to shop around, and even after you have deducted the £35 fee you still may be in pocket. There are some buildings policies that currently offer you the first three months for free, keep an eye open for them.

Good luck