How to find the best mortgage lendersWhich? urges buyers to compare costs over gimmicks

08 October 2014

The mortgage war of freebies continues to escalate, following a new offer from Lloyds Bank. 

The lender is offering an iPad mini - worth over £400 - to first-time buyers and home movers who apply for a mortgage before November 27.

This follows on the heels of a TSB offer last month - paying a year's worth of council tax (up to £2,500) for customers with a deposit of under 25%. Elsewhere, Leeds Building Society offer 'Welcome' mortgages, which have an introductory interest-free period of up to six months. 

Deals offering cashback incentives are also rife, with some lenders offering to rebate legal and valuation fees. Meanwhile, Cumberland Building Society currently repay homebuyers as much as 4% of their mortgage loan.

Which? Comparison Tables - Mortgages - compare the best deals on the market 

Compare the cost - not the offers

As tempting as these incentives can be, customers shouldn't be led by gimmicks.

We analysed which lenders offered the top five cheapest prices for fixed deals over two years - for a home mover with a 25% deposit on a £200,000 house, and for a first-time buyer with a 15% deposit on a £170,000 house, with any cashback incentive factored into the cost. 

In both scenarios, only one of the top deals (from Danske Bank and Yorkshire Building Society respectively) used cash rebates as part of their offer.

In the case of our home mover, the cheapest Lloyds deal was £1,616 (or around four iPad minis) more costly than the cheapest deal without any cash rebate - from West Brom Building Society. 

For our first-time buyer, opting for a Market Harborough deal rather than the cheapest TSB deal saved £1,715 - which is £670 more than the average council tax bill paid last year.

Getting the best deal

Which? offers an independent mortgage advice service, Which? Mortgage Advisers, that look at every mortgage from every available lender. You can also find an independent mortgage adviser using

Rupert Swetman, from Which? Mortgage Advisers, said: 'The mortgage market is fiercely competitive at the moment and lots of lenders are now offering all kinds of introductory rates or incentives which look incredibly generous. 

'But it is vital to weight up the overall cost of these mortgages, taking into account any booking fees, arrangement fees and of course interest rates during the introductory period of the mortgage and also once this period has come to an end.'

Which? Recommended Providers

Cost isn't necessarily the whole picture when comparing mortgage lenders. 

Following our latest customer satisfaction survey, First Direct and Coventry Building Society were both named Which? Recommended Providers, due to high satisfaction scores from their customers and competitively priced deals.

Find out more: Mortgage customer satisfaction - 29 mortgage providers reviewed

More on this…

Visit the Which? mortgage comparison tables - compare the best deals on the market
Mortgage reviews - see how lenders compare for customer satisfaction and service
What is a mortgage? - see which type of mortgage best suits you