MarketGuard to launch mortgage interest-rate insurance
MarketGuard, the derivatives trading company, has announced plans to launch the first interest-rate insurance product this year.
It will cover homeowners against rises in their mortgage payments resulting from a hike in the Bank of England’s base rate.
The standalone interest rate insurance (Sari) works by covering a mortgage holder against rises in the base rate above an “insured rate”.
For example, if the insured rate is at the current Bank of England base rate of 5.25%, any rise above this level would trigger a monthly payout equivalent to the increased interest repayment.
Commenting on the new product, David Hollingworth, of mortgage brokers London & County, said: “For anyone worried about rising rates, going with a fixed-rate mortgage is the best insurance policy.”
Meanwhile, the Treasury and some mortgage lenders are looking at ways in which homeowners can insure against a downturn in the value of their properties.
The new type of policy would use a property price index and offer protection based on house prices in a local area.
Category: Companies News, Home Insurance News, Insurance News
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