Cover fees make loan deals toughLenders charging you if you don't insure with them
26 February 2011
Mortgage lenders who charge fees for getting your buildings insurance elsewhere are making it more difficult for those trying to find the best mortgage deal.
Last month, we reported that the amount of set-up fees charged by lenders for a mortgage has increased markedly since 2007. More than half of mortgage lenders charge an insurance fee with some, such as Ipswich Building Society, charging as much as £45. We found that West Brom BS charged £35, while Dudley, Leeds, Loughborough and Market Harborough building societies all charged £30. Although you may decide to take out your insurance with your lender to avoid this fee, you could save a lot more by going elsewhere.
For example, we were quoted £360 by Ipswich for buildings insurance for a 55-year-old with a three-bedroom semidetached house in north London. The cheapest quote we found for a similar policy using a comparison site was just £181 from Which? Recommended Provider LV=, saving you £134.
We recommend you get insurance quotes from other providers before buying it direct from your mortgage lender. Visit our mortgage calculators to compare mortgage deals by total cost, or see our home insurance recommended providers for more.
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