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Specialist UK Mortgages...
State funded banks charging higher than average mortgage rates
Last week saw the one year anniversary of the Bank of England dropping its base rate to the historic low level of 0.50%.
During the last year some of the biggest lenders increased competitiveness, while others appear less willing or able to do so.
The table below shows how some of the UK biggest mortgage lenders’ average two year fixed rate deal has fared against the whole of market average.
While state funded Royal Bank of Scotland performed well, other state funded banks such as Cheltenham and Gloucester, Halifax and Northern Rock have struggled to meet the same grade.
Average two year fixed rate mortgage (75% LTV)
(Highlighted boxes show above market average rates.)
Provider |
Mar-09 |
Apr-09 |
May-09 |
Jun-09 |
Jul-09 |
Aug-09 |
Sep-09 |
Oct-09 |
Nov-09 |
Dec-09 |
Jan-10 |
Feb-10 |
Mar-10 |
Cheltenham & Gloucester |
4.42% |
4.37% |
4.35% |
4.34% |
4.87% |
4.84% |
4.77% |
4.82% |
4.76% |
4.58% |
4.58% |
4.58% |
4.57% |
Halifax |
5.48% |
4.64% |
4.58% |
4.49% |
4.94% |
4.86% |
4.77% |
4.60% |
4.60% |
4.51% |
4.63% |
4.38% |
4.27% |
HSBC |
4.34% |
4.27% |
4.17% |
4.17% |
4.02% |
4.07% |
4.07% |
4.07% |
4.07% |
4.27% |
4.27% |
4.07% |
3.99% |
Nationwide BS |
4.48% |
4.49% |
4.49% |
4.49% |
4.93% |
4.93% |
4.93% |
4.92% |
4.73% |
4.73% |
4.73% |
4.73% |
4.73% |
Northern Rock |
4.39% |
4.47% |
4.42% |
4.42% |
4.74% |
5.04% |
5.04% |
4.95% |
4.59% |
4.64% |
4.64% |
4.44% |
4.37% |
Royal Bank of Scotland |
3.57% |
3.57% |
3.27% |
3.27% |
3.79% |
3.79% |
3.79% |
4.04% |
4.04% |
4.04% |
4.04% |
4.04% |
3.84% |
Santander (Abbey) |
4.21% |
3.96% |
3.96% |
3.99% |
4.47% |
4.50% |
4.50% |
4.49% |
4.34% |
4.14% |
4.14% |
4.14% |
4.14% |
Woolwich from Barclays |
4.69% |
4.39% |
4.09% |
3.69% |
4.19% |
3.99% |
4.29% |
4.04% |
3.84% |
4.04% |
4.04% |
4.04% |
4.06% |
Whole of market average Rate (75% LTV) |
4.30% |
4.14% |
4.18% |
4.38% |
4.64% |
4.68% |
4.66% |
4.67% |
4.62% |
4.42% |
4.37% |
4.27% |
4.19% |
NB - Woolwich from Barclays had no 75% LTV deals available prior to December 2009. All figures prior to this date are based on 70% LTV. |
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Michelle Slade, spokesperson for Moneyfacts.co.uk commented:
“The large amount of money that has been pumped into some well known banks is still a sticky point with many British taxpayers.
“Many hoped that the state owned banks would be at the front of the queue for unlocking the mortgage market, but this isn’t the case.
“Some state funded banks appear to place a higher priority on getting out of Government ownership, rather than helping with competitive rates the customers who supported them.
“The notable exception is Royal Bank of Scotland, which currently offers some of the most competitive rates on the market.
“Stricter rules for building societies over funding and capital reserves could go some way to explaining why Nationwide BS also appears to finds itself less able to compete.
“Some lenders still appear more willing than others to lend, and bringing increased competition to the market through more competitive rates.
“In the last year, only a handful of mortgage lenders actively promoted their products in order to increase their share of the market and it is these lenders that have come out well in our survey.
“Unless more lenders become willing to lend, the mortgage market will continue to stagnate.
“The pricing in the mortgage market remains disjointed between the rates on offer and the cost of funding, with each lender taking a widely different view of the margin of risk they are applying to their mortgages.
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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