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Life insurance an essential part of mortgage planning

Date: Wed, 03 Aug 2005

People planning to take out a mortgage or remortgage their current property are being advised to ensure that they need to factor the cost of life insurance into their budgets.

Expectations that interest rates are to fall for the first time in two years has led to many lenders offering great deals on mortgages, however, potential borrowers are being warned not to be tempted solely by the new rates.

A combination of arrangement fees and life insurance premiums could make the offers less attractive in the long run.

"Despite their allure it is crucial that borrowers aren't tempted by the headline rate alone," warned Duncan Pownall, mortgage development manager at Bradford & Bingley.

"It is in this environment that seeking financial advice is vital to ensure that borrowers really do get the best overall deal for their circumstances," he added.

Mr Powell also stressed that borrowers need to consider the long-term commitment when taking out new loans and not such go for the most popular deal of the moment.


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