home contents insurance

yocas

when i took out my home and contents insurance with the halifax, i agreed that they take payment at the same time as my mortgage payments, looking back over my mortgage payments i have noticed that every year they have added the insurance circa £500 to my mortgage, meaning i have paid interest at a high culmative rate, this is not what i expected or understood. do you believe i have a case to get back the extra i have paid??

lisyloo

every year they have added the insurance circa £500 to my mortgage, meaning i have paid interest at a high culmative rate

Really?
How high is your mortgage rate?
Most mortgages are relatively low rates.

this is not what i expected or understood

Do you have paperwork that states what was agreed?

The amount is due up front, so if you don't pay it up front and pay monthyl then you have a loan. I would be suprised if you didn't agree to this on paper as the terms would have been stated. Also it would be a relatively cheap form of borrowing unless your on some kind of unusually high sub-prime rate.

do you believe i have a case to get back the extra i have paid??

Probably not.
All borrowed money has to be paid for unless explicitly stated it's 0%.
Have a look at your paperwork where the terms are stated.
If you don't have it then ask for a copy.
But as it all sounds quite normal I would expect the paperwork to be in order and you agreed when you signed even if you remember slightly differently.
I also suspect it's quite a low rate.
What are you paying as yor mortgage rate?

Stompa

Not an answer to your question, but £500pa seems pretty expensive to me (though of course there may be perfectly good reasons for that - valuable house, valuable contents, risky area etc.). Do you have to use Halifax for the insurance? If not, I'd be inclined to get some quotes from elsewhere.

opinions4u

Probably best to post on the insurance part of the forum.

I am assuming that your monthly payment collected has only covered the mortgage. You should really have spotted this when the first mortgage payments went out and also when your first annual mortgage statement was issued.

You should raise a complaint that they haven't collected the premiums as agreed and you are out of pocket as a result. If you can pay the missed premiums now and in full, ask them to cancel any accrued interest.

Alternatively, you need to work out an agreement how to pay the missed premiums. You have been insured, but your mortgage debt has risen to pay for it. You could leave the missed payments on the mortgage, but this will mean they are charged interest for the full mortgage term and repayment will be built in to your monthly payment over the remaining term.

Although Halifax have traditionally collected payments with the mortgage monthly payment (charging interest on the annual premium), more recently they have been able to collect a separate direct debit where no interest is charged on the premiums.

alanq

I used to have Halifax home insurance with my mortgage. When I paid off the mortgage I continued because I believed that otherwise I would be charged for deed storage and that therefore any savings I could make elsewhere would not be significant.

When I did eventually check I was shocked that I was being charged over twice as much as I would be elsewhere and that even Halifax would quote me a much lower rate. I also discovered that they no longer charged for deed storage so I quickly moved elsewhere and have not even considered getting a quote from them again.

I don't think that any mortgage provider can insist that one takes their insurance though they may make a charge for checking that the insurance one plans to arrange provides the required cover to protect their interest in the property.