According to new research released by the Post Office, almost half of all UK homeowners could be wasting money by insuring with their mortgage provider.
The research indicated that more than eight million people who own their own home could be losing a combined GBP40 million every year by choosing to purchase their home and life insurance from their mortgage lender, rather than shopping around for a cheaper deal.
The survey also found that nearly half of all homebuyers (46%) bought buildings, contents or life insurance from their mortgage lender, while one in 10 people did so because they believed it to be compulsory to buy home or life insurance from the same company that provides their mortgage.
Furthermore, one in 20 thought that their mortgage was at risk if they didn’t purchase insurance as well.
The ‘convenience’ factor also plays an important role, with 63% of those surveyed stating that they chose to insure with their mortgage lender as it was less hassle than shopping around.
Post Office Financial Services head of insurance Phil Ashkuri said: Convenient doesn’t always mean cheap. Many homeowners don’t realize taking out buildings and contents insurance with their mortgage lender is generally not the best value deal. And it’s not compulsory for securing their mortgage.