building and contents insurance tied into mortgage

rockyandbullwinkle

1st time on this. I was looking through some old paperwork the other day from when I first bought my house. I noticed that the building and contents payments were different every month as the provider calculated this in with the interest which meant some months I paid £30 and some £45.

I was only 22 when I bought this so very inexperienced and was told it was a condition of the mortgage and I was tied in for about 2 years.

Does anyone else have experience or heard of this.

Thanks

BobQ

rockyandbullwinkle wrote: »

1st time on this. I was looking through some old paperwork the other day from when I first bought my house. I noticed that the building and contents payments were different every month as the provider calculated this in with the interest which meant some months I paid £30 and some £45.

I was only 22 when I bought this so very inexperienced and was told it was a condition of the mortgage and I was tied in for about 2 years.

Does anyone else have experience or heard of this.

Thanks

They used to do this 20 years ago. I do not think that they can legally do this any more as it would be an unfair contractual term. What they can do is stipulate a minimum insurance on the house and charge you a fee for checking that your chosen insurance complies.

The contents insurance is none of their business as it does not affect the value of the property or its condition.

dunstonh

Actually, they are still allowed to insist on their own product but only where it is part of a packaged deal. They cannot insist on their own product as a lending condition. Although they can insist on a product type as a lending condition but give you the right to purchase where you like.

Thinking about why payments could be different, there could be a couple of reasons. Historically, there were providers that charged 4 weekly. If you switched to monthly payment but retained 4 weekly coverage, then some months would contain different number of weeks. Or it could be that the interest, which is charged daily, would be different depending on how many days in the month.

Best way to get an answer that is exact is to ask the lender themselves. However, if you are looking to make a complaint about being tied to lender then that will fail.

rockyandbullwinkle

they led me to believe it was a lending condition. It was definitely monthly and not 4 weekly.

I was not actually to fussed about being tied to the lender more annoyed really that there was interest added to it making the payments differ every month.

Surely it should have been the same payment every month and it shouldn't have had the interest added to it.

It was about 10 yrs ago and im more annoyed that I never challenged it but being so young thought that was they only option.

I may take it forward as I have every bit of paperwork.

Thank you for your help

roonaldo

rockyandbullwinkle wrote: »

they led me to believe it was a lending condition.

because it was, if they made it clear it was a condition there is no issue.

r more annoyed really that there was interest added to it making the payments differ every month.

there is no interest, you are mistaken. its not added to your capital so it doesnt incur interest.

It was about 10 yrs ago and im more annoyed that I never challenged it but being so young thought that was they only option.

then you are likely to time bar your complaint.

I may take it forward as I have every bit of paperwork.

just because you have been charged premiums doenst mean they are refundable just because you ask. This is not a fee or unfair charge, there are no issues with this. Also this is your house, and their security so you must insure it!

sorry but your clutching at straws.