Customers pressured into buying mortgage lender's home insurance

Tue, 08 Jul 2008

Many homeowners feel pressured into buying their home insurance from their mortgage lender, despite it probably not offering the most competitive rate, price comparison website gocompare.com has found.

Over 20 per cent of mortgage customers have their homes insured by the same company that provided their mortgage and half of them said they did so because they felt pressured by their mortgage provider or believed it was compulsory. Just 19 per cent said they bought it because they believed it was value for money, while two-thirds said it was easier and more convenient than comparing home insurance quotes to find the best deal.

"This is a worrying sign." Hayley Parsons, chief executive of Gocompare.com said of the results. "We know that mortgage deals have been harder to secure of late but we don't want to go back to the days when customers were often under pressure to buy the lender's products to help secure the loan ."

She added that customers were under no obligation to buy other products from their mortgage lender and that buying a lender’s policy could cost an extra £110 a year.
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