'€500 saving' for mortgage holders who switch policy
LESS than half of mortgage holders are aware that they can cancel their mortgage protection and get cheaper cover, saving them up to €500 a year.
Mortgage protection is a life policy linked to a home loan and pays out if the borrowers die.
There has been a collapse in premium prices, which has meant savings of up to €500 a year can be made by taking out a new policy, experts say.
The cost of mortgage protection and other life policies has fallen sharply because people are living longer, which means insurers have to pay out less often. And a savage price war between life companies has also brought premium prices down.
People are often not aware that they can cancel their policy and take out a new one.
Now a survey by Amarach Research for SmartQuotes.ie shows 45pc of mortgage holders are unaware of how much they are paying for their monthly mortgage protection policy.
Andrew Nevin of SmartQuotes.ie said savings of close to €500 a year could be made by switching from a protection policy taken out a few years ago when premiums were higher to a new one.
He said a 40-year-old couple, who do not smoke and have a mortgage of €250,000, could get mortgage protection for as little as €40 a month.
He said that about one-third of adults had a mortgage, but less than half of them knew how much they paid each month for mortgage protection.
"Struggling householders can free up their money to cover essential bills and boost disposable income," he said.
He said SmartQuotes.ie's analysis showed that mortgage protection rates could differ between providers by up to 37pc.
Last year, SmartQuotes.ie's average customer saved at least €492 by switching provider.
"That is a very significant amount, particularly considering figures this week from the Irish League of Credit Unions showed that more than one-third of consumers have had to borrow to pay their household bills in the past year," said Mr Nevin.