Mortgage PPI - don't overinsure yourself

woodhouseian

Hi

I was just wondering if anyone had already pointed out that, with the recent interest rate cuts, a lot of people's monthly mortgage payments have come down, and therefore they should reduce their MPPI cover to match.

For example I checked with my MPPI insurer yesterday. I was still covered for more than my current mortgage payment, and indeed more than the maximum total monthly amount they will insure! (I think that maximum is mortgage payment plus about 25% or 20%). I reduced it down to cover just my actual current mortgage and saved about a fiver a month. Not much, but worth doing I think..

Regards
woodhouseian

dunstonh

I was just wondering if anyone had already pointed out that, with the recent interest rate cuts, a lot of people's monthly mortgage payments have come down, and therefore they should reduce their MPPI cover to match.

Yes. Its been posted a fair number of times. However, nothing in the last month that I can remember.

There is a benefit to doing it but also a risk. If you have a claim and the mortgage rates go up (and payments increase) then you could find the insurer will not pay the increase as you reduced the cover. Possibly not an issue now but some time to come in the future it will be.