Part nationalised banks charge first time buyers more
January 21, 2009
Recent reports have indicated that the part nationalised banks in which the government owns a stake after bailing them out with taxpayers’ money are actually charging first time buyers more each month on their mortgages than other lenders are.
Although the banks have been bailed out with taxpayers’ own money these banks are charging around £50 a month extra on the average mortgage for first time buyers than other lenders.
The average rate being charges on variable rate mortgage products by the bailed out banks to first time buyers is 5.02 percent, and this compares to an average 4.87 percent on the same mortgages from lenders that have not received cash from the bailout fund.
For someone with a mortgage of £150,000 this would equate to nearly £50 a month more on their repayments once arrangement fees had been taken into consideration.
One industry official said: ‘It is striking that despite all the Government action to boost the mortgage market that the bailed-out banks are significantly more expensive on many products. But borrowers should not necessarily always steer clear of the Bank of Gordon as some of the members offer good deals.’
She went on to state: ‘The key to reviving the market though is more competition and the trend of the past few months has been a lack of competition.’
Amongst the bailed out banks that were looked at were Halifax, Intelligent Finance, Lloyds TSB, Cheltenham & Gloucester, NatWest, Northern Rock, and amongst the non-bailed out banks that were looked at were Abbey, Alliance & Leicester, Bristol & West, Britannia, The Co-op Bank, First Direct, HSBC, ING, Woolwich and Nationwide.
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