Question of Finance: Mortgage protection -- where is the best deal?
Q: My wife and I have recently been granted mortgage approval on our first home.
These are very exciting times for us but we are also determined to start as we mean to go on and get all our financial affairs in order from the get go.
I'm wondering if it's easier to buy all our ancillary products such as mortgage protection from our lender so everything is with one source or would shopping around make any difference? Our budget is tight.
A: Often first-time buyers are under the misconception that they have to take out a mortgage protection product with their lender and others simply feel obligated to do so -- neither should be the case.
Mortgage applicants are not under any legal obligation to purchase or retain these types of products from their mortgage lender.
Having a broker or an independent financial adviser as a reference point when sorting out all your financial affairs can really be of benefit.
While going with your lender can seem like a convenient option, it is worth your while to shop around.
Additional financial products offered by your lender are in some cases actually more expensive when compared with similar products available in the marketplace.
A recent analysis of the market conducted by Caledonian Life showed that the cost of Mortgage Protection cover for the same individual with the same value on their mortgage can vary by as much as €7,000 over the term of the mortgage.
A mortgage is a huge undertaking for any individual or young couple and, now more than ever, it can be a daunting process.
Seeking independent financial advice is a good way to start doing this process.
- Greg Dyer, head of sales and marketing, Caledonian Life.