Banks compete to be cheapest mortgage lenders

04 January 2007
Mortgage borrowers were best served by banks in 2006, who remained the cheapest mortgage lenders last year, research from financial researchers Defaqto has revealed.

For standard variable rate mortgages or equivalents, HSBC charged borrowers £2,888.01, £493.63 a year cheaper than the most expensive equivalent deal.

The next cheapest was Intelligent Finance, although building societies completed the top five cheapest lenders list – Skipton, Nationwide and Britannia.

Banks are now attempting to keep their competitive edge by launching retail-modelled sales on savings and mortgage products for the new year.

Three of Britain's biggest four banks this week launched mortgage deals, with HSBC launching cheap mortgage and credit card offers in the Green Sale, and Barclays Bank's mortgage arm Woolwich and Lloyds TSB following suit.

"January and February are the two busiest months of the year from a personal finance perspective as people make concerted efforts to get to grips with their financial affairs," Stuart Glendinning, managing director of the price comparison service MoneySupermarket, told the Independent.

"These sales are as much about persuading customers not to shop around and take their business elsewhere as they are about actually recruiting new customers."

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