Protection is widely available
OFTEN new mortgage-holders believe they are under an obligation to take out a mortgage protection policy with their mortgage lender.
Some believe it is a legal requirement, while others believe that their lender will look on them in a more favourable light if they do so, according to Sara Murphy of Caledonian Life.
"Neither of these assumptions are true and by not comparing providers, consumers could be spending more than they need," she said.
Mortgage protection is usually a prerequisite to securing a mortgage and in most cases will be assigned to your mortgage lender, as security for your mortgage loan.
However, all borrowers are free to take out their mortgage protection policy with whichever provider they choose and can benefit from any cost-savings available, Ms Murphy said.
First-time buyers in particular need to be aware of the large price differentials across the market when it comes to mortgage protection premiums, the Caledonian Life executive said.
"This means that by choosing one provider, without looking at competitors' offerings, new buyers could be incurring unnecessary costs," she added.
Due to increased competition in the marketplace among the providers offering mortgage protection, there is a significant price variation between the most expensive and the cheapest product available.
Depending on people's age and circumstances, potential savings can range from €1,800 to over €5,800 over the term of their policy, depending on their chosen provider.
Irish Independent Supplement