If you have your contractor mortgage with the Yorkshire Building Society you will be interested to know that Britain’s second largest Building Society is considering giving free unemployment protection to all its mortgage holders.
The Yorkshire BS is currently having talks with insurers to see if they can buy a blanket unemployment policy which will provide cover for all its mortgage borrowers if they are made redundant.
Although details are still in the initial planning stage, this new initiative could be introduced next year and the good news for customers is that they will not face any extra charges. It is expected that the cover will cost the Yorkshire tens of millions of pounds to insure all of its 400,000 borrowers.
This might seem like a drastic step but it reflects the concerns of the mortgage lending industry as a whole as they worry about the impact the financial crisis is having on borrowers. The problem is also likely to get worse as the Government’s austerity measures take hold.
A senior figure at the Yorkshire said the economic crisis had caused the Building Society to take an imaginative look at the financial risks facing the business. Although the Yorkshire is reasonably optimistic about the recovery continuing, it pays to err on the side of caution and have a contingency plan if things start to go wrong.
Currently there are no other lenders considering a similar scheme but this could change if the economic outlook worsens.
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