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Best
centralised lenders 2003
The centralised
category is made up of the lenders that don't have branches. Instead
they offer mortgages via the internet and telephone and through
brokers.
As in 2002, First Direct has topped the centralised lenders category
over ten years, and outperformed other large organisations to be
named our national lender of the year. These achievements show borrowers
at First Direct have been receiving a consistently good deal. "We
have a policy of long-term value," says the bank's chief executive,
Alan Hughes. "We don't always appear to have the best headline
rate but over time, we like to think we offer our customers the
best deal."
Second over ten years is Britannic Money. The lender is know for
its pioneering approach to mortgages: as First Active it launched
a flexible mortgage in 1995 and the UK's first current account mortgage
in 1997. And it is behind-the-scenes innovation that enables it
to offer a competitive deal, according to head of strategic development,
James Mayne. "Unlike many traditional lenders who fund their
mortgages off the back of their retail savings operations we fund
our mortgages through the securitisation market," he says.
"The ability to continually offer competitive interest rates
depends upon our skill and expertise in this funding technique,
for which we are market leaders."
The five year category is topped by Sainsbury's Bank. The bank's
product range is limited - there are two SVR mortgages, two fixed-rate
deals and two discounts, with rates based on your chosen loan to
value (LTV). However Sainsbury's Bank will consider loans of up
to 100 per cent LTV - good news for first-time buyers.
"We're constantly looking at how we can add value," says
Lucy Hunter, mortgages product manager at Sainbury's Bank. In February
2002, this quest led the bank to launch a loyalty scheme for customers,
based on Nectar points. Every December borrowers will receive 30,000
points, worth £150 in a Sainsbury's store. Hunter says: "That's
something that isn't't included in these calculations. But if you're
looking at long-term value it's worth noting."
Intelligent Finance is still a relatively new player in the mortgage
market but it has managed to top this category over two years and
has proved the cheapest lender overall over this period. The lender
offers a three-month discount on its loans but after that all borrowers
move to pay the SVR. While borrowers who take only a mortgage can
be sure they are paying a competitive rate, those who add savings
and a current account can achieve even better value. Spokeswoman
Jennifer Blackwood explains; "If someone has a £95,000
mortgage with us and £8,000 in savings they will be achieving
a rate equivalent to 3.8 per cent for the life of the mortgage."
| Top
ten lenders over ten years |
| Rank |
Lender |
Amount
paid |
| 1 |
Intelligent
Finance |
8,194.63 |
| 2 |
Egg |
£8,555.61 |
| 3 |
First
Direct |
£8,690.30 |
| 4 |
Legal
& General Mortgages |
£8,782.90 |
| 5 |
Sainsbury's
Bank |
£8,933.15 |
| Over
5 years |
| Rank |
Lender |
Total
Cost |
| 1 |
Sainsbury's
Bank |
£25,863.15 |
| 2 |
First
Direct |
£26,255.50 |
| 3 |
Scottish
Widows |
£26,344.69 |
| 4 |
Legal
& General Mortgages |
£26,442.02 |
| 5 |
Direct
Line |
£26,565.51 |
| Over
10 years |
| Rank |
Lender |
Total
Cost |
| 1 |
First
Direct |
£55,738.72 |
| 2 |
Britannic
Money |
£59,961.76 |
| 3 |
UCB
Home Loans |
£60,034.10 |
| 4 |
Sun
Bank |
£60,101.49
|
| 5 |
Legal
& General Mortgages |
£60,279.05 |
Click
here for an explanation of how the awards are calculated.
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