Defaqto awards financial services star ratings

First Direct and Liverpool Victoria have come out on top in Defaqto’s latest Star Rating tables for mortgages.

Some 60 analysts from Defaqto worked for a year to rate 2,874 products as part of its annual financial services review, resulting in its annual Star Ratings tables.

Each product is allocated a Star Rating based on in-depth assessment of its features and benefits across over 70 categories.

Five-star products do not necessarily mean they are the cheapest, but instead are the products that have been earmarked as offering a more sophisticated or added value service.

One-star products represent a more basic product offering.

Although Defaqto does not analyse mainstream residential mortgages, it has unveiled the top providers for offset and equity release.

Offset mortgages were judged on features such as payment flexibility, the number of linked accounts available, and how easy the account is to obtain.

First Direct, Clydesdale Bank and Yorkshire Bank were all awarded five-star ratings for their offset products.

For equity release, products were judged based features such as a no negative equity guarantee, and whether products were available on buy-to-let properties or second homes.

Out of the equity release providers, Liverpool Victoria was the only one to be awarded a five-star ranking.

Kevin Bray, banking insight analyst at Defaqto, says: “In the five-star category about 10% of the products on the market achieved this score, with the same proportion at the bottom end.

“A lot of lenders and providers will be in the middle of the road, and they will have positioned their products deliberately to appeal to those who are looking for particular features within a particular product.”