2007's cheapest mortgage lender

Posted: 03 Jan 2008 09:23:10 GMT

HSBC has been named as the cheapest mortgage lender in 2007, based on a £50,000 loan at the standard variable rate being lent to an existing borrower.

HSBC has been named as the cheapest mortgage lender in 2007, based on a £50,000 loan at the standard variable rate being lent to an existing borrower.

Figures from Defaqto show that HSBC borrowers paid £3361.99 in interest throughout 2007.

Skipton followed, with borrowers paying £3435.07, as did Nationwide (£3485.07), Intelligent Finance (£3518.29) and Direct Line (£3537.92).

Commenting on the survey, David Black, principal consultant of banking at Defaqto said that a tough year had pushed interest rates up.

"In 2007 there were three increases in Bank [of England] base rates and one decrease so it is not surprising that the average cost of servicing a standard variable rate mortgage for the largest lenders rose last year by 14 per cent over the cost in 2006," he commented.

"While it is acknowledged that standard variable rate mortgages are only one type of mortgage, their importance may be increasing due to the knock-on effects of the credit crunch, making it more difficult to obtain attractive alternative deals," added Mr Black.

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