Building Societies Offer Good Deals on SVR mortgages

Building societies are fast catching up with banks when it comes to offering the cheapest deal on a Standard Variable Rate (SVR) mortgage, according to new research.

HSBC and Intelligent Finance may have come top of the best value SVR mortgage but Nationwide, Skipton and Britannia building societies can also offer a good deal, according to research company Defaqto.

Homebuyers taking out a £50,000 SVR mortgage will pay £2,834 a year with HSBC, £500 less than an equivalent deal with the next highest ranking bank, Cheltenham and Gloucester and £575 less than with Bank of Scotland.

David Black, head of banking at Defaqto, said: "With Bank of England base rates on average higher in 2005 than in 2004, it's not surprising that typically it cost five per cent more to service a standard variable rate mortgage in 2005 than it did in 2004.

"Although it is recognised that standard rate mortgages are only one type of mortgage, they do represent an important benchmark in competitiveness."

He added that many people were losing out by not taking advantage of competitive short-term rate deals offered by the majority of lender with their SVRs.