Loan Interest Rate Insurance Launched

Financial Services > Personal Loans > News

Fri, 11 Jul 2008

Insurance firm MarketGuard are offering homeowners a new type of insurance by offering protection against rising interest rates . The Interest Rate Insurance pays out to policyholders whenever the base rate surpasses a specified level, whilst there is also an option for an increased payout in the instance of the base rate significantly exceeding a designated level, for example by 1 per cent, or 2.5 per cent. The cover starts at £17 a month for a £100,000 mortgage, though this basic option only pays out if the base rate climbs above the agreed limit by two per cent.

Chief Executive of MarketGuard, Chris Taylor, is reported to have said, ‘Today’s borrowers are highly indebted and have massively overstretched to get on the housing ladder. Currently there is only one way for individuals to protect themselves from rising interest rates – through a fixed rate mortgage . We’ve changed that with the launch of this product which we believe will help bring some stability to people who are either on a variable rate mortgage or coming to the end of their current fixed rate with no way of remortgaging onto another deal because of the withdrawal of products and tightening lending criteria or the prohibitive cost of remortgaging.’

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