The mortgage is the simple biggest investment any household will ever make. It accounts for the largest proportion of most households’ monthly income. Given that a recent survey by Which? suggested that most households only have savings for 4 weeks’ worth of mortgage costs, a Mortgage Waiver is a perfect feature to give peace of mind to customers.
Some mortgage lenders ask whether a Mortgage Waiver feature will increase the cost of their loan, the answer is: not necessarily. Within any mortgage rate charged the mortgage company already has an amount allocated for acquisition, retention, arrears, bad debt, collections, legals, recovery, solvency profit and many other cost centres.
Mortgage Waiver would certainly be another cost centre, but having Mortgage Waiver in place is expected to reduce the incidence of arrears, which in turn will have an impact on customer collection costs, legals, recovery and ultimately the cost of solvency.In most instances the true cost of the Mortgage Waiver feature is negligible. The mortgage company will also be expected to receive more new business because of the enhancement to their mortgage offering.
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