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State-owned banks fail on mortgage satisfaction

Bank of Scotland, Halifax and Northern Rock worst

mortgage papers

Variable rate mortgages can leave you vulnerable to increases in the Bank of England base rate

State-owned mortgage providers are trailing behind smaller lenders and building societies for customer satisfaction, according to the latest survey from Which? Money.

The new research found that Bank of Scotland had the lowest customer score of 41%, with Halifax (44%), Northern Rock (45%) and Lloyds TSB (48%) close behind. Not being able to get the same deals as new customers and not being informed of better mortgage deals when theirs came to an end were the main gripes reported.

First Direct top for mortgage customer service

For the third year running, First Direct topped the survey, with an 89% score, although it slipped slightly on last year’s 91%. Which? members rated First Direct highly for statement clarity, customer service and their ability to rectify problems – 96% said they would recommend First Direct to a friend.

The Co-operative Bank came second with 78%, knocking the One Account into third place with 77%. The average score was 61%.

Just one in ten always switches when deal ends

Four fifths of Which? members were satisfied with their mortgage provider, although there was room for improvement, with fewer than half very satisfied. Two thirds of members felt their existing mortgage was the best deal for them and three quarters had not experienced problems with their current lender.

Only 10% of Which? members said they changed their mortgage every time their deal ends.

Big banks fail to match building societies for service

Which? chief executive Peter Vicary-Smith commented: ‘Once again, the big banks are failing to treat their customers as well as the small lenders and building societies, despite all of the public funding they have received.

‘Don’t take the lazy option of simply taking out a deal with your bank or staying on your lender’s standard variable rate – check if you could get a better deal elsewhere and vote with your feet if so. While getting a good deal is usually a top priority, getting good service matters too.’

Find the best mortgage for you

Before committing to any mortgage deal, make sure you’re getting the best deal using the Which? mortgage finder. It takes the hassle out of comparing mortgage deals by taking account of rates, fees and charges to show you the total cost of the home loan you’re considering.

For more information on the different types of mortgages on the market, read our Mortgage deals explained and Mortgage basics advice guides.

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