A RECENT survey by leading protection broker Goodfellows reveals that mortgage lenders are selling expensive and unsuitable mortgage payment protection insurance (MPPI) with their mortgages.

Posing as a potential customer Goodfellows’ managing director, Simon Burgess, phoned the top 25 mortgage providers by sales volume to obtain a mortgage with MPPI, which is designed to protect mortgage payments if you lose your job, fall ill or have an accident, which prevents you from working.

According to Goodfellows, the average cost of MPPI from the major lenders is £6 per £100, which is almost double that charged by independent providers.

The worst offender offered a premium of £7.70 per £100.

All 25 lenders failed to inform Mr Burgess that he could shop around for a better rate and save himself £3,075 over the lifetime of his mortgage.

A Council of Mortgage Lenders spokesman defended its members and said that most purchasers of MPPI are happy and the relatively low take-up of MPPI was due to customer’s reliance on other types of insurance such as Critical Illness and Income Protection.