The survey also revealed there was an annual difference of almost £500 between the cheapest and more expensive mortgages.
Defaqto’s annual survey found that for standard variable rate mortgages or their equivalent, HSBC was the cheapest, followed by Intelligent Finance. But the research shows that the next three lenders in the top five were all building societies, Skipton, Nationwide and Britannia.
The research was based on the amount of gross interest payable on a £50,000 interest-only mortgage provided by the top 30 lenders in 2005, as defined by the Council of Mortgage Lenders. In order to provide a level basis for comparison, specialist providers were not included, neither were any privilege or loyalty rates.
Borrowers with HSBC paid £2,888.01 for their mortgage in 2006, which is £493.63 a year cheaper than the most expensive equivalent deal.
David Black, head of banking at Defaqto, said: “Despite two Bank of England base rate increases last year, on average they did not change significantly from 2005 so it’s not surprising that it cost virtually the same to service a standard variable rate mortgage in 2006 as it did in 2005.
“While it is recognised that standard variable rate mortgages are only one type of mortgage, they can represent an important benchmark in competitiveness. This demonstrates why borrowers must take the time to check that they have the most appropriate mortgage.”
