Revealed: the lenders you want to ditch
Homeowners with mortgages from Accord, Bank of Ireland and Leeds Building Society are more likely to want to switch to a better deal over the coming year than customers of lenders including Cheltenham and Gloucester, HSBC, First Direct and Birmingham Midshires.
According to the Moneywise Consumer Opinion Survey 2014, which surveyed 35,000 people nationwide, 25% of Accord customers would like to switch, closely followed by Bank of Ireland at 23% and Leeds Building Society at 21%. The desire to switch was also high (at just below 20%) for customers of big name lenders including Halifax, Santander, NatWest and RBS.
By comparison, fewer customers wanted to ditch lenders including Cheltenham & Gloucester, First Direct, HSBC and Birmingham Midshires, all of which had a rate of 10% or less.
Unsurprisingly, those borrowers that wanted to switch deals were more likely to be unsatisfied with the rate they were paying on their mortgage.
If you are looking to switch to a better rate, borrowers with a 60% deposit can get a two-year fix at 1.48% from The West Brom. However, fees are high at £2,400 plus a £99 booking fee meaning borrowers with smaller loans may be better off paying a higher rate on a deal with a lower fee. Yorkshire Building Society is offering a two-year fix at 1.84% on loans up to 65% of the property's value. Its fees are more reasonable at £845 on completion plus a £130 booking fee.
Alternatively if you are happy not to fix, HSBC is offering a two-year discounted variable at 1.49% for a £999 fee on loans up to 60% while Furness Building Society is offering a two-year discounted variable rate of 1.5% on loans up to 70% for the same fee. If a higher rate/lower fee deal suits you better, Barnsley Building Society has a two-year tracker currently at 1.84%. Its fee is £345 for completion and £130 for arrangement.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.