payment protection insurance

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moneymoney

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I have a mortgage with which I have mortgage protection insurance, I also have income protection insurance from my employer. Now I want to take out a personal loan - anyone know do I need to take out payment protection cover?? seems to add about 50 euro per month onto loan repayments. appreciate advice, thanks
 
Hard to tell without more info but ... many (re)payment protection insurance policies are bad value for money because the premiums are inflated with high commissions/charges and the policies only pay out in restricted circumstances and for limited periods of time. Check the terms & conditions of the policy in question. How big is the loan? Could you not get a mortgage topup and pay it off overa similar term to the personal loan thereby availing of a probably much lower rate of interest?
 
ta for reply clubman, loan is 25000 which i am ashamed to say is to cover debt consolidation. I did look into a top-up, was refused then was approved (by the same bank) but I have recently made a complaint about this as i met with a mortgage advisor in April/May and only got the approval in writing in August, it was also at a different rate as offered over the phone/in person and different to that of my existing mortgage, also a different fixed term (perhaps this is standard, I don't know) - I just found it too stressful and confusing to deal with - as you might gather Im not good on money matters and now I am in a situation where I just have to lower the monthly repayments I am making. I will have a look at documents on the mortgage insurance this evening - don't know what I took out, was a first time buyer at the time through a broker and just never shopped around since
 
moneymoney said:
loan is 25000 which i am ashamed to say is to cover debt consolidation. I did look into a top-up, was refused then was approved (by the same bank)
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I don't understand - if you were approved for a mortgage topup then why is that not an option (ideally with the topup repaid over a similar term to the alternative personal loan) over a presumably more expensive unsecured personal loan?
I will have a look at documents on the mortgage insurance this evening
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I don't understand what this has to do with your query.
 
clubman, the bit about the insurance documents was in relation to the first part of your reply re not enought information. Do you think I should top-up based on the following facts: existing mortgage - fixed at 4.65% for 2 years (since June 07) - Bank offered the top up at a fixed rate of 5.6% fixed for 3 years.

My problem is, I was offeren a fixed rate of 4.9% over 2 years at the begining, but because they didn't process my application (it took them almost 4 months), rates had gone up and they offered it over 3 years at 5.6%.

Im confused!!
 
Personal Opinion - I would never buy payment protection and I would never recommend that a client buy it.

I would guess that very few of the people that sell it with loans and mortgages, actually buy it themselves.
 
I was referring to the terms & conditions of the proposed unsecured personal loan (re)payment protection insurance policy - not your mortgage protection life assurance cover.

You mean a €25K topup on the mortgage at a fixed rate of 5.6% (CAR?) with the existing bulk of the mortgage staying on 4.65% fixed? If so then what are the details of the alternative unsecured personal loan? If it was over a similar period (3 years) with a higher interest rate then surely the mortgage topup is a better option especially if you clear it within the 3 year fixed period?
 
sorry, I don't think Im making much sense here, the bank will offer the top-up over the term of the loan which has another 35 or so years to go, but they will fix the rate for the first 3 years.
 
F. Kruger, you say you wouldn't recommend it - silly question but what happens if something did happen (death, illness etc.). I don't think its as good as its made out to be as from what ive read it will only cover the first 12 months in the case of illness or redundancy. too much small print in these things for my liking but I suppose with 25,000 on loan and if something did ever happen I don't want to think anyone else would have to pick up the pieces for me
 
I would not recommend it because I feel that it is not good value for money. I don't expect people to do everything that I recommend to them, the final decision is theirs.

You have Mortgage Protection and Income Protection.

If you are worried about the 'death' side of things you should enquire what the current sum insured is on your mortgage protection policy and then reconcile it with what you owe. There may be a bit extra cover that you are not aware of i.e. that the sum insure is higher than what you owe, as the decreasing rate of the policy was higher than the interest rate you were/are paying.
 
moneymoney said:
sorry, I don't think Im making much sense here, the bank will offer the top-up over the term of the loan which has another 35 or so years to go, but they will fix the rate for the first 3 years.
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Yes - but you can still work towards clearing the topup within this three years rather than paying it (and consequently for the stuff bought with the loans being consolidated) over three decades! Can you clarify if the lender is offering one three year fixed rate for the topup and will keep the bulk remainder of the loan on the othe fixed rate mentioned? To be honest I think you should probably get independent, professional advice (not from a tied agent such as your lender's counter staff). Maybe ask MABS for their opinion?
 
thanks for all advice and apologies for my lack of knowledge but really finding it hard getting to grasps with the fine print, fixed rates, insurances etc. Clubman, I think I will get independant advice. thanks again
 
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