The fallout from the credit crunch and predicted falling house prices have forced mortgage lenders to consider their positions in the market and reassess their attitude to risk based lending.
Exclusive research carried out by moneyfacts.co.uk shows that, from the top 250 mortgages in the market today, only 68 (27%) are offered by the top 10 mortgage lenders. This is a surprising statistic considering these mortgage lenders took 75% of the market share in 2006.
Post credit crunch some of the larger mortgage lenders have appeared to have suffered the most, previously they had been able to fund a large section of their mortgage lending through the money markets, but today that just isn't possible.
From the results it is clear that the larger institutions with smaller subsidiary companies such as RBS Group with brands such as First Active, Natwest and Direct Line and its Irish subsidiary Ulster Bank are offering more competitive mortgages.
Of the 68 products, The Royal Bank of Scotland Group offered 26 these came from 9 separate brands, second came HSBC with 13 products, 5 offered by the increasingly competitive subsidiary First Direct. Northern Rock, Alliance and Leicester and GMAC all failed to appear in the top 250.
These results clearly show that the larger institutions, especially banks, are not offering the most competitive mortgage products. Failure to find enough funding could be one reason, but reliance on their brand name and our loyalty has to play a part.
In a time when many are struggling to find a suitable mortgage these results show that it is definitely worth looking around for the best deal. Going for a smaller, less well known lender may well save you money.
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