Why Mis Sold Mortgage Protection Insurance Is So Damaging

Perhaps the absolute worst part of the PPI racket is mis sold mortgage protection insurance UK consumers have been forced to deal with. It is, without a doubt, the most expensive simply because of the fact that mortgage loans are so much higher than the typical loan. If you figure that the average price of a new car in the UK is listed at approximately £28,000 and the average mortgage is at £228,041 then you will see that a mortgage loan is approximately 900% greater than a car loan! Since both are charged single premiums when the loan is agreed, and the cost of PPI is a percentage of the amount being borrowed, it stands to reason that lenders make much more money off mis sold mortgage protection insurance than any other type of PPI.

 

The High Cost of Mortgage Protection Insurance

Payment protection insurance can cost anywhere from 13% to 56% of the amount being borrowed. If you wanted to get a rough estimate of why mortgage protection insurance is said to be the most damaging, let’s take a look at a typical mortgage loan and a typical automobile loan to see why there  is so much concern over mis sold mortgage protection insurance. If a car loan is for £25,000 and the price of PPI is rated at 50% then the consumer would be adding £12,500 to the cost of a new car! However, if a mortgage is for £200,000 and that home buyer was charged the same rate of 50% then the cost of PPI on that mortgage would be £100,000. Now you can see why there has been such a commotion in regards to mis sold mortgage protection insurance and should consider mking PPI Claims!

 

It is hard to imagine that any lender would be so devious as to sell a consumer insurance that costs £100,000 and to make matters worse, it is most often an insurance cover that offers no benefits! If you find that you have been mis sold mortgage protection insurance you can file a PPI reclaim for a refund of any money you have paid in premiums and interest.