Is this reasonable?

lala1974

Hi everyone,

Our Halifax mortgage statement arrived yesterday. We owe just over £34,000 and pay an additional £24.00 each month for re-payment insurance. I always assumed that this was a compulsory payment and didn't realise that this was something I didn't have to have (or could have shopped around for). Does this sound familiar to anyone?

We're 4 years in to this current 5 year fixed term. However, we've always used the Halifax as our mortgate provider (12 years) and am not sure if this is something that they've charged us for that long!

I wondered if the £24 sounds reasonable to you guys.

Sorry if this is confusing or sounds stupid!

dunstonh

I wondered if the £24 sounds reasonable to you guys.

Banks are typically quite a bit more expensive than buying insurances via IFAs or on the whole of market. So, chances are you that you are paying over the odds. However, price is not something you can complain about.

Everybody knows banks are more expensive and the only reason you would buy from them is a [misplaced] belief that it is easier. i.e. you are doing it for convenience.

magpiecottage

£34K loan. Assume 17 years (12 years customer four years of this loan means original taken out 8 years earlier - probably for 25 years). Assume interest rate of 5% and repayment. That gives a monthly payment of £247.74.

If we assume 9% premium (what the FSA dictates should be used in redress calculations) that comes to £22.30.

£24 is not much more. If you cover insurance payments (life cover, buildings etc) it probably comes very close.

lala1974

Thank you for taking the time to respond.
You have been very helpful