Direct Lender Mortgage Deals Account for 81% of Lowest Rates in Past Year

LONDON, October 20, 2011 -

• Direct lenders provide 100% of best buys in two year discount, lifetime tracker and five year fixed mortgage categories

Direct mortgage lenders have continued to dominate best buy tables in the past year, with 81% of the market leading rates being offered directly by providers.

Research by independent data provider Moneyfacts looked at the lowest mortgage rate available from mortgage brokers and directly from lenders, across the four most popular mortgage categories: two year fixed, five year fixed, two year discounts and lifetime trackers.

Key Findings:

• Over the last year (Oct 2010-Sept 2011), the lowest rate offered by direct lenders has been on average 0.14% points lower than the best rate offered through the intermediary channel. For a typical £150,000 mortgage it equates to £… per year in extra interest if the customer had selected the intermediary route rather than going direct to the mortgage provider.
• For two year discounts the margin has been 0.25%, for lifetime trackers 0.19%, and for five year fixed 0.18%.
• The two year fixed category was the only one dominated by an intermediary provider thanks to a single broker product which was on offer during the research period.

Pete Dockar, HSBC Head of Mortgages, said: ‘The research shows that the recent trend for direct lenders to offer the lowest rates has continued in the past year. Mortgage customers used to rely on brokers for the best deals, but this is no longer the case.’

HSBC has never sold its mortgages via intermediaries. The bank’s strategy is that it believes it is best placed to sell its own mortgages, and that lender and borrower need to deal with each other during the sale process to make the best lending and borrowing decisions. 

Pete Dockar continued: ‘Borrowers need to check newspaper best buy tables, comparison sites and lenders directly to ensure they are getting a great deal. HSBC accepts around 9 in 10 of all customers who apply for a mortgage with the bank and the growth of our mortgage business backs this up.’

Over the past five years the HSBC group has quadrupled its mortgage market share and continue to dominate best buy tables.

Notes to Editors:

All product data supplied by Moneyfacts

No house purchase or remortgage distinction, whichever was the lowest loan was included.

Intermediary loans include all intermediaries as well as selected intermediaries only

Lowest initial product rate used, fees and LTVs were not considered.

HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people.  In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.    

The HSBC Group: HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,691bn at 30 June 2011, HSBC is one of the world’s largest banking and financial services organisations.

For further information please contact:
Simon Coughlin
+44(0)20-7992-1574
simon.coughlin@hsbc.com
www.hsbc.co.uk/newsroom

.