Bradford & Bingley Buildings Insurance -how does this happen?

kzb

Hi, I'm a newbie here so apologies if this question has come up before. If so, perhaps someone could direct me to previous correspondence on the subject.

I had (still have) a Bradford and Bingley straight repayment mortgage. The buildings insurance premium was added on to the bottom of the mortgage statement. The combined mortgage and insurance premium was fixed at the same monthly figure for a year.

A couple of years back, they announced some shenanigins with the buildings insurance provider. Mortgage holders could go with their new provider, or switch to their own. Fellow B&B mortgage holders will probably know what I am on about here.

Trying to be clever, I came up with a cheaper buildings insurance provider, and I told B&B that I was switching to that.

But something has gone strangely wrong, in a way that I still cannot fathom out. I get no satisfaction from B&B themselves, nor other financial advisors.

The buildings insurance annual premium from the new provider is (for arguements sake) £250. The B&B provider was going to be £300, or £25 per month. So as far as I was concerned, I should be £50 p.a to the good.

However, I then got my revised monthly payment from B&B. It has gone down by only about 3 quid a month. The interest rate and all other factors are the same as previous year. So bearing in mind I now have to find £250 as a separate payment, I seem to be worse off by switching to a cheaper insurance !

Why has the B&B payment reduced by £3 per month and not £25 per month? I've got some kind of flow diagram from B&B which they say is a full explanation. Something to do with paying for insurance that I've already had.

But it does not add up to me at all. How can it cost me extra money to go with a cheaper insurance provider? No-one can explain this simple fact. If there is anyone on here with a