The mortgage industry is calling for the introduction of a standardised mortgage payment protect- ion insurance (MPPI) comparison system, writes Adele Burton.
At the moment brokers have no means of comparing MPPI products when making a sale.
Richard Riding, chairman at Payment Shield, said: ‘No one has developed a direct comparison service yet. I would like to see a better comparison of products where you look at a common platform, which most lenders use.’
Rod Murdison, proprietor of Murdison & Browning, agreed: ‘I would like to see a standardised comparison system showing a five-year policy with three-month unemployment cover, day one cover and a two-year payment period.’
The problem when comparing MPPI products, however, is that there is a range of individual features attached to each provider’s product. Each product has its own complexities and there are probably almost 20 different factors which affect the final price of a product.
Geoff Hall, chairman at Berkeley Alexander, said: ‘There is not a standard way to compare products and there is no industry-standardised system. The problem is that it is difficult to compare products as each product is unique. You could devise a standard product comparison but each provider would want to get their product shown in the best light and you would have to have a section showing ‘extras’.’
A spokesperson at data provider Moneyfacts said it does not have any comparison tables for MPPI. The only information they can provide is whether the product is available with a loan, free of charge.
As technology advances and information becomes more readily available we could see a standard MPPI comparison table evolve.
Riding said: ‘We are getting nearer to a common platform. This has been helped by the Association of British Insurers and the Council of Mortgage Lenders pulling together and issuing standard guidelines on MPPI. This has got rid of a lot of anomalies in the market.’