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Mortgage and insurance policy
Pete_A.
Posts: 2 Newbie
Hi,
Apologies if I am in the wrong place, but this is all new to me!
My problem is this.
My buildings and contents insurance policies are with the same company as my mortgage, until this year, all payments came out of my account in one payment each month.
Having received an auto renew policy of £500 for buildings and contents, I decided to visit a few comparison sites, and low and behold, managed to get new policies for £180. (With the same company!!!!!) great I thought, saving in excesses of £300 per year.
My first payments came out this month, separate to my mortgage payment, no problem, except, my mortgage payment has remained the same.
Spoke to customer service and they tell me, my old policies have been stopped, but I just cannot understand what they are explaining to me, as to why my mortgage payment is still the same. (Something about insurances were calculated over the length of remaining mortgage term)
To my mind, I have saved over £300 a year on insurance, but am now paying £180 a year more.
Can anyone help me understand this, or should I query this further.
Many thanks
Pete
Apologies if I am in the wrong place, but this is all new to me!
My problem is this.
My buildings and contents insurance policies are with the same company as my mortgage, until this year, all payments came out of my account in one payment each month.
Having received an auto renew policy of £500 for buildings and contents, I decided to visit a few comparison sites, and low and behold, managed to get new policies for £180. (With the same company!!!!!) great I thought, saving in excesses of £300 per year.
My first payments came out this month, separate to my mortgage payment, no problem, except, my mortgage payment has remained the same.
Spoke to customer service and they tell me, my old policies have been stopped, but I just cannot understand what they are explaining to me, as to why my mortgage payment is still the same. (Something about insurances were calculated over the length of remaining mortgage term)
To my mind, I have saved over £300 a year on insurance, but am now paying £180 a year more.
Can anyone help me understand this, or should I query this further.
Many thanks
Pete
0
Comments
-
There are two possible scenarios here. They seem to be explaining one.
1 - The mortgage payments are only adjusted once a year. Any shortfall/surplus is then taken into account when setting the next year figure.
2 - If it is not 1, have you allowed enough time for the adjustment in the payment to be made? Direct debits are usually submitted around 10-20 days before the payment date. So, if you only stopped the auto-renewal shortly before the mortgage payment date, they would not be able to catch it in time. Any surplus would be treated as an overpayment or adjusted in the next cycle.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Ah, that makes a little more sense, thank you.
Can I therefore expect a reduction when next mortgage review is due?
Assuming no interest rises!!!0 -
Ah, that makes a little more sense, thank you.
Can I therefore expect a reduction when next mortgage review is due?
Assuming no interest rises!!!
If yours is on annual review, then yes you will.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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