Building societies offer most of the best mortgage deals

A recent report has claimed that the vast majority of affordable mortgages actually come from building societies rather than from banks, and as a result of this consumers thinking of taking out a mortgage are being advised to steer clear of banks when it comes to finding a low cost mortgage deal.

Research suggested that 70% of the best mortgage deals around actually come from building societies, suggesting that consumers have a much greater chance of getting an affordable mortgage from a building society than from a bank.

The survey was carried out by Moneyfacts, and showed that many of the big name banks were not offering the best deals on home loans and mortgages. The report claims that the top ten mortgage lenders offer only 11% of the best rate mortgages out of 250 variable, fixed, and discounted mortgages that were looked at. Banks offered just 30% of the 250 best rate mortgages, according to the report.

An official from Moneyfacts stated: 'It is shocking to see that so few of the top priced mortgage deals are offered by the largest mortgage lenders. The Royal Bank of Scotland Group under the brands of First Active and Direct Line lead the way, offering a meagre six out of the top 250 deals, and very disappointingly the largest lender the HBOS group, parent of Halifax, did not appear at all.'

She added: 'For the majority of borrowers, the deals from building societies and smaller lenders are winning hands down. Making one of your biggest financial decisions should not be based upon brand or the perceived convenience of your existing lender. It should be about finding the most competitive and suitable deal. Take the time to shop around, and don't assume that bigger means better. In fact when choosing a mortgage quite the opposite is true, both with building societies dominating the field and the lack of large lenders appearing in the top 250 products.'

Tom Smith
17th November 2007

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