In 2007, £360 billion was borrowed in mortgages by banks and building societies and while the cost of your mortgage may be a touchy subject, did you get a good or a bad mortgage?
Well, that question depends on where you got your mortgage from!
If you are mortgage customer with banking giant HSBC then you should be feeling happy, as it kept its stop spot as the cheapest mortgage provider last year.
HSBC was closely followed by two building societies, Skipton and Nationwide in terms of cost effectiveness.
A "league table" produced by financial services research company Defaqto said borrowers with HSBC paid £3,361.99 on a £50,000 pound interest-only mortgage last year; this was £532.39 cheaper than the most expensive deal
That sounds like quite a tidy saving to us!
The Top 10 league table of cheapest mortgage providers was as follows:
- HSBC
- Skipton
- Nationwide
- Intelligent Finance
- Direct Line
- Britannia
- the One Account
- Standard Life Bank
- Yorkshire Building Society
- Principality Building Society
Most expensive?If you are a customer with The Bank of Scotland, then you might be upset to know that it was deemed the most expensive to have a mortgage with, closely followed by the Royal Bank of Scotland and the Clydesdale Bank.
Surprisingly, Britain's largest mortgage lender, Halifax, was only 17th-cheapest out of a total of 29 lenders, while Northern Rock, (remember them?) Britain's fifth largest lender and the main casualty of the credit crunch, came in 22nd place...although we are not quite sure how it managed that!
The survey by Defaqto looked at standard variable rate (SVR) mortgages or their equivalent for existing borrowers, and does not include specialist providers or loyalty rates.
David Black, principal consultant for banking at Defaqto, commented on their findings:
"In 2007 there were three increases in bank base rates and one decrease, so it is not surprising that the average cost of servicing a standard variable rate mortgage for the largest lenders rose last year by 14% over the cost in 2006.
"While it is acknowledged that standard variable rate mortgages are only one type of mortgage, their importance may be increasing due to the knock-on effects of the credit crunch, making it more difficult to obtain attractive alternative deals."
Something also worth remembering is that over 1.4 million of us will see our fixed rate mortgage deals end in the next couple of months; and that may not be good news...
It means that most of us will have to find on average an extra £200 per month more to meet the cost of servicing our mortgage.
Ouch!
So, if your fixed rate deal is about to end, maybe you should start looking around for some impartial advice on comparing mortgages?
After all, why pay more for your mortgage, when you could be paying less?