Playing the field cuts pounds 3,000 off premiums

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STEPHEN LAFFY is 41 and a self-employed musician. He and his wife, Lynn, who is an ante-natal teacher, bought their first home in May.

They knew nothing about mortgages and life insurance before they started the home- buying process. But they were determined to get as clued up as possible before deciding on the type of loan and life cover to have.

Their dogged persistence will save them more than pounds 3,000 on the cost of life cover over the term of their mortgage.

The house they wanted to buy, a terraced property in Watford, Northamptonshire, cost pounds 50,000; they needed a mortgage of pounds 34,000.

Mr Laffy says: 'I went to the library and read a couple of books. They were a great help. I decided that a repayment mortgage and a mortgage protection policy would be best. I was not interested in an endowment mortgage.

'First, I went shopping around the building societies for a mortgage. It seemed like a minefield. All the building societies pointed out that they were an agent for a life company but the first couple of times I did not really understand what it all meant.

'There was no pressure put on me, but if I had not read the books I would have been very confused. You always have the feeling that you should immediately take what is offered in case you do not get anything else.'

Mr Laffy eventually chose the Nationwide for his repayment mortgage. He then turned his attention to life insurance.

Nationwide offered the couple a mortgage protection policy through its tied insurance link with Guardian. The premium for a joint life policy for a 24-year term with a sum assured of pounds 34,000 was pounds 17.51 a month.

Mr Laffy decided to check out some other insurers before committing himself.

'People get different quotes for builders but seem to accept the first figure when it comes to anything financial,' he says. 'It is a bit of an effort to shop around, but it is worth it.'

The couple chose a joint life policy with Zurich Life, which was arranged by the independent mortgage brokers London and Country Mortgages.

There was no extra to pay because of Mr Laffy's unusual work. Those in dangerous or non-professional jobs may get a loading from some companies. He pays pounds 14.53 a month, fixed for the whole term of the loan. If the policy were with Eagle Star the premium would be pounds 27 - nearly twice as much. Over the 24-year term this would have cost the couple more than pounds 3,000 extra.

With the downward trend in rates, if Mr Laffey took out the same cover today - even though he has had a birthday since he bought his house - the cheapest quote available is pounds 14.15 a month with Scottish Widows. Zurich Life is pounds 15.23, and Eagle Star is pounds 29.