Fee for NOT insuring through lender

[rob.jarvis]

As a landlord I'm aware that lenders charge fees for every conceivable activity. However I am disgusted today because a new BTL mortgage offer from Bank of Ireland includes a £25 fee for not taking out buildings insurance through them.

Are they allowed to do this?

[P.Pilcher]

I hope that they stated that this was their policy BEFORE you took out the loan with them, and I hope that your alternative insurance is more than £25 below the quotation from the lender!

P.P.

[Tax Accountant]

I am sure that they justify this on grounds of additional administration costs for ensuring from third party insurers that the property is adequately insured, thereby proptecting the lenders security.

They, amongst others, are now trying to maximise their income in every way possible.

Some lenders only charge this as a one-off fee at the beginning and not annually.

Ramnik

[LMT]

Make sure they don't add the fee on to your mortgage loan otherwise it ends up at a lot more than 25 quid with 25 years of interest on it......
I usually get out of the fee from the Woolwich by citing the hassle I've had from them in the past and saying I shouldn't be forced into accepting a substandard service - you are not in a position to do so. Pay for the first year and make sure you write to tell them you do not want to renew. Keep a copy and don't sign up for any direct debits for the renewals.
BTW you are not obliged to pay any mortage company this fee if the insurance is under a block policy for a group of flats. They don't tell you this!!

[MrWoof]

The first time I took out a BTL mortgage, I ran into this sort of thing but my broker suggested 'Mortgage Trust'. I have to say that their service is excellent, none of this type of hassle and best of all, I have interest only offset mortgages with them. This means that I have my company account, client account and a private current account all offsetting the interest I pay. I can access the accounts online and by phone, brilliant. Their interest rates are competitive too.