13:04 PM, 10th March 2014, About 10 years ago 3
Ever since I took out my buy to let mortgage, I have availed of the lender’s building’s insurance, but as it is very uncompetitive, I am in the process of cancelling it and taking a policy from a 3rd party insurer (at a savings of about 60%!).
The current lender is insisting on the following before it will cancel their existing policy:
1. Provide a copy of the new schedule (which they will review to consider it acceptable or not).
2. Want an index linked clause for re-building costs. The current estimated re-building cost is £82k but the new policy I am looking at has a threshold with a £400k re-building cap (but without an indexing cap).
3. Proof the insurer is a member of FCA (which is not a problem).
4. Confirmation that the lender’s interest has been noted.
5. They intend to charge an admin fee of £25 (which they have the cheek to suggest the new insurer might pay!).
I have never had a lender request the above before.
Is this common practice and can they insist upon it?
Lastly, can a lender charge an admin fee?