Are bank mortgages more competitive than building society mortgages?

powerwin

In general, would you say that bank mortgages are more competitive than building society mortgages?

If so, is that just because banks can raise capital more cheaply than building societies?

Thanks

hcb42

I wouldnt say they are cheaper, but that is my opinion on my straw poll of one, as my bank mortgage rates are laughable (and thats for a LTV of under 50%)

madmish00

I have generally found buildings societies to have better deals than banks but that is my personal experience.

For example Norwich and Peterborough Building Society are currently offering a 2yr discount variable with initial rate of 2.59% on 85% LTV or a 2yr fixed at 3.99% on upto 85% LTV

There may be better rates with more equity but I have not found better than these for high LTV

On the other hand my current mortgage with Nationwide is on a great rate but their rates for new lending are rubbish at the minute!

Cozworth806

I find that a lot of BS mortgages are not competitive in the general market.
Nationwide rates when we bought two years ago were much higher than C&G but Skipton was marginally lower than C&G (who we ended up going with) but they were the only ones mainly that ranked close. Britannia were similar to C&G but for more strict lending criteria.

Nationwide spout loads about mutuality but do not show much in reality that benefits its customers/members

holly_hobby

Dont forget banks have share holders - so profits are a big issue for them - and they make their profit on lending money.

Building Societies are mutuals - no shareholders - so have more rein and flexability on rates as they are not purely driven by profit margins (although important of course).

Holly

Brallaqueen

From m y experience, banks offer better rates but have tight lending criteria, whereas BS are more likely to offer to more people & at higher LTVs (90%) but at higher rates.

opinions4u

It varies from bank to bank and building society to building society.

It varies from time to time.

Speaking generally, and at this point in time, I think you'll usually find the cheapest mortgages from a bank - namely HSBC. But certain building societies can be more flexible in their underwriting.

madmish00

Banks offer better rates but have tight lending criteria, whereas BS are more likely to offer to more people & at higher LTVs (90%) but at higher rates

Having applied for mortgages at Nationwide BS and with Norwich and Peterborough BS I have to say there is a world of difference in how 'tight' the lending criteria is. As far as calculating affordability is concerned Nationwide simply wanted to know about any other outgoing credit accounts. N&P on the other hand wanted a full breakdown of every outgoing imaginable - all household bills, car expenses including petrol, clothing spend, entertainment spend, gym memberships... they even said they would likely take up employment reference on my partner as he has 'only been in his job for 18mths'. Nationwide didn't care when he was still in his probation period!

I certainly wouldn't assume that building societies are dearer but it does all depend on individual circumstances