Bank or Building Society

Froggitt

ReportInvestor wrote:

To Froggitt

Ever the optimist, eh .

Ever

Remember Stan Life was as staunchly mutual as Nationwide a few years ago.

Froggitt

HGLTsuperstar wrote:

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

If the NW Board want to demutualise, they have the power to remove the signaway if they want to.

TangentMan

There is little difference between Banks and Building Societies. When they were formed there was, Building Societies where essentialliy cooperative style clubs to help people get access to money where the banks would not touch them (the working class) and as a rule of thumb explains why the Building societies come from the industrial areas (Halifax, Leeds, Woolwich, Birmingham) and why the Bank's don't.

However all that has long since gone. Some of the names above are now no longer Building Societies and indeed no longer indepedent.

In terms of who they work for, both Banks and Building Socieities work for their shareholders - in the case of a Bank it is shareholders for BS it is their members (who are nominally customers). In an ideal world all those profits are ploughed back into better rates for the BS customers - perhaps there are some examples where this translates to lesser differential between savings and loan interest rates following a BofE rate change ..... but perhaps not!

In terms of mortgages, Banks and Building societies are slightly different :-

1) Banks have more liberal rules regarding how they can raise the money to lend to us. BS had a historical tie to their depositors funds.
2) BS tend to have mortgages as a core product - their raison d'etre - whereas to a Bank it is more likely to be another in their portfolio (your current account is probably more central).

If anything goes wrong with your mortgage there is a perception that the nice friendly BS will be more approachable and helpful than a mean and nasty Bank. However if you are having a problem with the core product of an organisation and owe them money you cannot expect a softer shoulder to cry on from the BS than the Bank.

Don't know if any of the above helps!

It might be as you say that the broker is thinking of his commission not only more money for this transaction but also more possibly pushing for a different fee arrangement for his portfolio within the bank's intermediary relationship structure (as it grows), indeed it might also be that he is thinking to churn you in two years time when you hit the higher SVR from Halifax as you are more likely to want to remortgage from that higher rate.

Fundamentally you need to go with the best product for you. If you think you are going to remortgage again anyway in two years (whether it be NW or Halfax's variable rate you are on) then one thing to consider is the costs you will pay to do so (exit fees and so on). Some lenders will waive some fees if you are staying with them others don't - i am not sure of Halifax's / Nationwide policy on that but i guess if one is cheaper to stay with it gives you the option of future money saving (even if you leave them anyway).

Sun

Thanks all, I am going to another borker to get a 2nd opinion.