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HSBC tops cheap mortgage chart

HSBC’s standard variable rate mortgages have been rated the cheapest in Defaqtos annual survey.

Borrowers with HSBC paid 2,888 for their mortgage in 2006, which is 494 a year cheaper than the most expensive equivalent deal.

HBOS Intelligent Finance came out second in the survey, but the research shows that the next three lenders in the top five were all building societies, Skipton, Nationwide and Britannia.

The survey also found that there was an annual difference of almost 500 between the cheapest and more expensive mortgages.

The research was based on the amount of gross interest payable on a 50,000 interest-only mortgage provided by the UK’s top 30 lenders, 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.

David Black, head of banking at Defaqto, says: Despite two Bank of England base rate increases last year, on average they did not change significantly from 2005 so its 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.

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