Bank or Building Society

Sun

I am a FTB

Should I go with Bank or Building Society (both offering me almost similar deal for 2yrs) ??

What is the difference betwewn two and any recommendations ?

Thanks

Aiadi

I don't think you could generalise and say banks are better than building society or vice versa. I might be wrong but I think banks work for their shareholders and building societies work for their customers.

If you are talking about 2 major or well-known banks and building society then I would not let reputation guide my choice- I would choose between the 2 products offered, not go on the name of the bank/building society. That's my opinion.

It might help if you mention the name of the 2 lenders you are deciding between.

ReportInvestor

I agree.

Compare the terms and conditions, which are contractual, whatever the type of institution.

After two years you can look around the market again for the best deal - assuming there are no penalties on either product at that point.

Sun

I am comparing between Halifax & Nationwide

Borker is pushing Halifax and indirectly mentioned that Banks are better & safer.... (may be because he get more commssion from Halifax)

Nationwide's rate after 2 yrs is ~0.5% less than Halifax.

Aiadi

Give the exact details of each deal if you have them. Do they have the same initial interest rate? Are they fixed/tracker/discount/variable? Do they have early repayment charges? If you can put up the details we might be able to decide which is better, although it's difficult because we don't know your personal circumstances.

I personally would go with the better rate, they are both very reputable companies.

Ask your broker what he means by the 'Bank is better'- if he can't give you a proper/believable explanation then go for the better deal.

(Thats apart from the fact that I wouldn't trust a broker who gave advice which he/she couldn't back up with knowledge)

HelpWhereIcan

Sun wrote:

I am comparing between Halifax & Nationwide

Borker is pushing Halifax and indirectly mentioned that Banks are better & safer.... (may be because he get more commssion from Halifax)

Nationwide's rate after 2 yrs is ~0.5% less than Halifax.

In my case, the Halifax would pay the same (or possibly less) than the Nationwide. The difference in commission between the two is hardly likely to persuade anyone to risk unjustifiably pushing one over the other. The difference (if there is one) is likely to be no more than 0.05% ie. £50 on a £100,000 loan. Not something I would risk losing the goodwill and future business of a customer over.

With regards to the Halifax v Nationwide question, each has advantages over the other, but I do not necccesarily agree that Halifax would be 'better and safer'.

All other things being equal, I would normally consider the Nationwide over the Halifax for the following reasons:

1. As you said, long term standard variable rate is 5.89% rather than 6.5%, which means that Nationwide would be better value over the long term if you are unable/unwilling to remortgage at the end of your deal. Not as unlikely as it may sound as changes in circumstances could mean that a 'high street' deal may not be available immediately when you are due to remortgage.
2. Nationwide make all their deals available to existing customers (although you will still have to pay any arrangement fees), the Halifax is thought by some to be offering the least competitive exisiting customer deals (and is thought by some to be the main target of the Nationwide's current advertising).
3. Depending on the deal and your circumstances , the flexible options with the Nationwide can be much better than those offered by the Halifax.

This is not, however, me saying that Nationwide is better for you - just giving you some reasons to consider. The Halifax can be more flexible with underwriting, more generous with the loan amount available so there are reasons to go with them as well.

As the others have said, pick it first on who is offering the best deal (I usually use total cost over a period ie 2 year deals, total cost including interest and fees calculated over 2 years). It is unlikely that they will be exactly the same in that regard.

Hope this helps

Froggitt

Assuming the rate (and all the other things that matter to you) is the same, go with Nationwide on the offchance of a demutualisation windfall.

ReportInvestor

Sun wrote:

Broker is pushing Halifax and indirectly mentioned that Banks are better & safer.....

What on earth is he going on about? The lender is giving YOU money, not the other way round!

The Nationwide variable rate has been creeping up over the last two years.

If you are likely to remortgage anyway after two years, I'd go with the best deal.

To Froggitt

Ever the optimist, eh .

HGLTsuperstar

Froggitt, you forget about the need to sign away windfall rights for IIRC 5 years

Sun

thanks all for comments..

you are right long term rate for nationwide is 5.89% and for halifax its 6.5%, besides they both have 4.39% fixed deal with almost similar charges (Nationwite asking for more initially and halifax after 2 yrs).

I guess difference is commision, halifax pays £300 more to broker compared to nationwide.

ReportInvestor

HGLTsuperstar wrote:

Froggitt, you forget about the need to sign away windfall rights for IIRC 5 years

I'm afraid it's a lifetime sentence at Nationwide.

But if Sun is a non-signaway member as a saver, then taking out a mortgage with Nationwide could entitle him to two windfalls if it demutualises.

Never say never, but Hell might need to freeze over first.

And it won't happen in the next two years.