Comparing the best mortgages for you
[ Posted April 24th, 2009 ]Finding the best mortgage deal is a nightmare with so many competing banks and building societies offering their own best rates.
With thousands of banks, building societies and brokers offering advice, it’s important that you understand the market so you know you are getting the best mortgage deal.
Take the new launch of HBSC mortgage advisor service. The bank says they will compare your mortgage to all the other deals on the market and tell you which is the best.
But this comes with some conditions:
- The bank can only advise you about their own products
- You have to make a decision whether the bank’s products are better for you than one from another lender
The risk is the bank is cherry-picking the best mortgage customers for their own products and the mortgage service is just an exercise in gaining publicity for the bank.
The spin is that the bank will try and help you, but if they can’t they’ll suggest someone else who might.
As a mortgage customer, the bank’s service gives you no advantage because the information they are passing on is freely available on the web anyway.
Finding the best mortgage deal is hard enough as it is, and services like this are only marketing initiatives to get you through the bank’s doors.
The other issue is the bank will no doubt try and sell you their life insurance and mortgage protection cover as part of the package- and often the high street lenders load the premiums with huge commission.
Shopping around for a mortgage and related products from an independent broker is likely to save you money because they are not tied in to offering a limited range of products.
As a mortgage seeker, you have to remember that the lenders all borrow from the same wholesale money markets and pay roughly the same rates for their borrowings.
The different mortgage packages offered are variations on a theme — a fixed rate may save you money in the short term, a tracker may save you money in the long term but overall, they will both probably cost you about the same over the life of the mortgage.
The choice of how you want to take that discount is yours, but the wrapper is the honey trap the lender baits their honey trap with to get you through their doors instead of their rivals.
To find the best mortgage for you, consider looking at a free mortgage comparison web site like ours. Filling in a simple form will return a search of the market in minutes and if you do decide to take up the bank’s mortgage service, you’ll have the information at hand to check their claims.