HSBC remains “best-value” mortgage provider

HSBC has retained it position as the UK’s best-value mortgage provider for 2007. Second place was taken by Skipton and Nationwide building societies.

A survey by Defaqto, the financial services research agency, found that last year borrowers with HSBC paid £3,361.99 on a £50,000 interest-only mortgage, £532.39 less than for the least competitive product.

The poll’s top ten also included Intelligent Finance (the online bank), Direct Line, Britannia, One Account, Standard Life Bank, Yorkshire Building Society and Principality Building Society.

Bank of Scotland, RBS and the Clydesdale Bank featured in the “most expensive” category.

Of the 29 lenders surveyed, Halifax, which is the UK’s largest mortgage lender, came 17th and Northern Rock, the country’s fifth largest lender, took 22nd place.

The results are based on standard variable rate mortgages, or their equivalent for existing borrowers, and do not take into account loyalty rates or products offered by specialist lenders.

Defaqto’s principal consultant for banking, David Black, comments: “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.”

For the largest lenders, the three increases in the Bank of England’s base rate during 2007, and one decrease, increased the average cost of servicing a standard variable rate mortgage by 14%, as compared with 2006.

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