Best mortgages from small lenders?
Tuesday, 29 November 2005 12:00
When it comes to taking out a mortgage, most Britons will head to the security of a big brand, but could they be making a mistake?
While it seems intuitive that a larger lender will have cost benefits from running a bigger operation, in practice this option does not automatically mean a cheaper deal.
"Whilst consumers may assume that the larger and well known lenders will offer the best deals, be more cost effective and generally pass on the benefits of their corporate wealth to their customers, this is certainly not always the case," said Rachel McKay, mortgage analyst from price comparison service Moneyfacts.co.uk.
Ms McKay points to figures showing that for a five-year fixed-rate mortgage, the 50th biggest mortgage lender outperforms the market leader - being cheaper on both interest rates and fees.
In fact, research for the firm shows there are 18 smaller lenders with both lower fees and rates than the largest provider on the high-street.
"It is important that the customer realises that there is a huge choice when it comes to mortgage providers, and as the information above shows, biggest doesn't always mean the best deal," she concluded.
To compare some of the cheapest lenders available - regardless of their size - to see if you can save money on your home loan, click here.
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