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Building societies better for mortgage deals
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Property owners are better off choosing a mortgage deal with a building society as opposed to a high street bank, according to new research.
A report from Moneyfacts.co.uk has found that building societies offer customers substantially lower average rates on home loans.
Rates
The report found that a typical five year fixed-rate mortgage with a building society has an average rate of 3.21%, in comparison to 3.51% with banks. On a £150,000 loan, this could save property owners £1,440 over the course of the five year agreement.
Similarly, an average two year fixed-rate mortgage commands a rate of 2.78% with banks, but 2.54% with building societies. On a £250,000 mortgage, a homeowner would save £744 over two years by choosing to go against the banks.[1]
Disappointing
Charlotte Nelson, finance expert at Moneyfacts.co.uk, feels it is disappointing that banks are not proving more competitive in the mortgage market, considering the amount of Government assistance that they have received over recent years.
Building societies better for mortgage deals
Nelson said that, ‘Moneyfacts.co.uk has compared the mortgage offerings of building societies and banks and found that building societies are the undeniable winners. Not only do building societies come out on top when it comes to rates but the gap between those from banks is getting wider, suggesting that borrowers may need to look away from traditional banks to get the best deal.’[1]
She continued by stating that it is, ‘disappointing that despite all the money given to banks from the Government-backed Funding for Lending Scheme and the ever-growing price war between providers that banks are still failing to compete on the overall cost.’ Concluding, Nelson said, ‘now that local building societies are offering a genuine alternative to banks, perhaps it is time for borrowers to look closer to home to get the best mortgage deal.’[1]
[1] http://www.express.co.uk/finance/personalfinance/583511/Mortgages-spurn-the-banks-save-hundreds-pounds
