Only 2.7 per cent of people taking out new mortgages and 5.4 per cent of existing borrowers have financial cover to ensure continuity of their payments if they become unemployed.
The figures were revealed by online market research firm Usurv following the commissioning of a study by British Money director, Simon Burgess, which involved asking 1,000 new mortgage borrowers why they didn’t purchase unemployment cover; 46 per cent said their lender did not discuss the opion with them. A further 27 per cent thought the cover was unneccessary as the State would protect them if they lost their job and 24 per cent said they were put off the product as it has a tarnished reputation.
The remaining 3 per cent did purchase the cover.
Burgess comments: “These figures are astounding, why are so many mortgage lenders shying away from offering the very products that will prevent customers from amassing debts and enable them to keep their homes during times of hardship?
“It doesn’t make sense – lenders are asking borrowers to jump through hoops to evidence they can meet their financial commitments before offering a mortgage but are not offering support mechanisms when they can’t.”
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