Fianna Fáil TD for Mayo Lisa Chambers has criticised the conditions of the Rebuilding Ireland Home Loan Scheme (RIHL) in which those who have managed to get a loan under the scheme can only buy mortgage protection with one nominated insurer.
Deputy Chambers commented, “Under the rules of the RIHL scheme, borrowers are forced to take out their mortgage protection insurance with one insurer and are only allowed to shop around if that insurer has rejected them. It is an affront to their consumer rights that they are tied to one insurer for this product and cannot shop around for the best value.
“Local authorities are specifically exempt from the provision in the Consumer Protection Code 1995 which allows borrowers to source such a policy from whomever they choose.
“While the Minister says that the nominated insurer has won a competitive tendering process, there have been claims that some borrowers would be able to access mortgage protection insurance at better rates elsewhere.
“This is another slap in the face to my constituents in County Mayo who have gone through the long application process and do not have freedom of choice when it comes to their mortgage protection.
“The current rate for mortgage protection insurance under the RIHL scheme is 0.55%. Given the average loan amount for all applications to date is €188,924, the estimated average monthly repayment for mortgage protection insurance is €87.38. Offering a single group rate to encompass the circumstances of all borrowers almost certainly means that some borrowers are paying over the odds.
“The government needs to ensure that additional funding is provided for the continuation of the RIHL scheme but they should also remove unnecessary bureaucracy and allow consumers to shop around for the best value for products such as mortgage protection insurance cover,” concluded Deputy Chambers.