Intermediary lenders close the best buy gap

Direct-only lenders continue to dominate the best buy tables but intermediary lenders are starting to close the gap, analysis from Evaluate Technologies shows.

Evaluate ranked 150 mortgage deals across all product categories. Each time a lender appeared in the top 10 in the three months to March 31 they were awarded a point, with the lender with the most points judged to offer consistently good value.

First Direct received the highest overall score of 19 but was only marginally ahead of rival the Post Office on 18 and Alliance & Leicester on 15 points.

Yorkshire Building Society was in fourth position with 13 points while Abbey for Intermediaries was ranked eighth after failing to appear in the top 10 in Q4 2009.

Bank of China, which only launched in the UK last summer, failed to make the top 10 but offered two best buys in the period.

Five of the top 10 lenders came from two parent groups. HSBC and its First Direct brand were rated joint seventh and top respectively, while Santander UK-owned A&L, Abbey and Santander clocked in at third, joint seventh and sixth.

Government-owned the Royal Bank of Scotland, NatWest and Northern Rock failed to make an appearance in the top 10 and only offered one best buy product each in Q1.

None of the Lloyds Banking Group mortgage brands including Halifax, Cheltenham & Gloucester and Bank of Scotland offered any deals rated as best buys.

Jim Barrowman, national acc-ounts director at Evaluate, says: “It is encouraging to see change in the list of the most competitive lenders, with no single firm dominating on a consistent basis.

“But it is clear that HSBC/First Direct and the Santander group of lenders are dominating the best buys at the moment.”

Last week the Post Office announced its fourth cut of the year to its fixed rate mortgages, which its says reflects its ambition to become a leading player in the mortgage market.

It is now offering a two-year fixed rate at 3.15% at 75% LTV, a three-year fixed rate at 4.09% at 60% LTV and a five-year fixed rate at 4.84% up to 80% LTV.

The new rates can be accessed with immediate effect and are available both online and via branches.