Alliance & Leicester Mortgage compulsory £25 charge added onto mortgage

mpoppins

We are just remortgaging with Alliance and Leicester and in the ''print'' it states that there will be a £25 charge added to the loan amount if we do not take out their buildings insurance.

This means that over the next 2 years or maybe longer we are paying interest on the £25. We were not given the choice to pay it as a one off payment which is extremely irritating..... but more importantly should Alliance and Leicester be allowed to make this charge, and make this charge in this way!.... is it not illegal????
Help!

MortgageMamma

NO its not illegal and its quite common with most lenders

the charge is for them assessing whoevers buildings insurance you choose to take to ensure its adequate cover and they are satisfied with the policy

Think yourslf lucky some lenders charge much more than this

If you can't pay it upfront then phone up the day after completion and pay it off as an overpayment then you wont pay interest on it

absolutebounder

mpoppins wrote: »

This means that over the next 2 years or maybe longer we are paying interest on the £25.
Help!

Oh my god thats terrible! It will be all of 11pence per month. It will cost you more whinging about it. Why not pay it up front then you wont be paying interest on it and you will save yourself a fortune in lost interest.

MarkyMarkD

There are bigger things to worry about in the world than interest on £25. As absolutebounder says, simply pay an extra £25 if you want to, and then you won't get charged interest on that £25. It's not rocket science.