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Why the biggest lender might not be the best…

Why the biggest lender might not be the best…

Category: Mortgages

Updated: 21/02/2011
First Published: 21/02/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgage borrowers have been reminded of the importance of shopping around after some of the best mortgage deals were revealed to come from smaller lenders.

The latest research from Moneyfacts.co.uk found that while the UK's largest lenders offer around three quarters of all the mortgage deals in the market, they only provide just over a quarter of the best mortgages currently available.

Of the top 500 mortgages on offer, only 145 come from the biggest lenders.

Just six of the top 50 two year fixed rate mortgages available to borrowers with a minimum 15% deposit (85% loan-to-value) are offered by the largest lenders.

Where the big lenders are most competitive is in the two year tracker market, although even then they still contribute less than half of the top 50 deals.

Larger lenders also appear to be concentrating on offering more competitive deals to borrowers with at least a 25% deposit.

Michelle Slade, spokesperson for Moneyfacts.co.uk, said the figures show that when choosing a mortgage lender, it is vital to remember that the biggest lenders might not always be the best.

"At a time when the cost of mortgages continues to rise, these results show that it is even more important for borrowers to shop around to get the best deal.

"When selecting a new mortgage deal, borrowers should ensure they look at the true cost of the mortgage, including the fee.

"A deal with a low rate, but a high fee could work out more expensive than a slightly higher rate with a much lower fee.

"Some of the lowest rates on the market charge a percentage fee, which can work out very expensive if you have a sizeable mortgage."

Our mortgage best buy charts reveal the best mortgage deals currently available to borrowers, regardless of the size of the lender.

Find the best mortgage rate - Compare best selling mortgages

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