Building societies grant nearly another of mortgages – but exactly how do their rates compare to the largest banks?
Getting a mortgage for any property in Surrey from a building society in Leeds may appear a little odd in writing, but homebuyers might be passing up on the very best deals by overlooking building societies located in areas they don’t live in.
Here, we check out how mortgage deals from building societies compare against the big banks, and offer suggestions about the pros and cons of utilizing an inferior lender.
Building societies report surge in mortgages
An increasing proportion of homebuyers are looking to building societies within their look for the very best mortgage deal.
New data in the Building Societies Association (BSA) claims its members approved 126,209 mortgages in the third quarter of 2022, a rise of 10% year on year.
The BSA says building societies now grant nearly a third (31%) of all new mortgages, and lent a total of lb3.9bn within the third quarter of 2022.
How do building society mortgages compare?
In the tables below, you can observe the way the cheapest fixed-rate deals (by initial rate) from building societies match up against those from banks at four loan-to-value (LTV) levels – 75%, 80%, 90% and 95%.
For each level of borrowing, we’ve taken the least expensive mortgage offered by banks and building societies, respectively, and compared them alongside each other. The deals from building societies have a red icon alongside them.
Simply click the column headers to switch between your different LTVs, and click the links for more information about each deal which? Money Compare.
Does the structure society offer mortgages?
As you can observe within the tables above, the deals offered by building societies are competitive – and in some cases market-leading.
The great news is that many building societies offer their deals across the country, as opposed to just in their local area.
Some lenders are larger than you might expect, too. Three building societies – Nationwide, Coventry and Yorkshire – were one of the 10 largest lenders in the UK in 2022, based on data from UK Finance.
If you’re considering using a building society, it can be helpful to get advice from a whole-of-market large financial company, who can access deals that aren’t available straight to customers.
The table below shows all the building societies that provide mortgages, and the areas by which they lend.
Building society customer satisfaction
But how do building societies compare when it comes to customer support?
When we surveyed thousands of mortgage holders captured and asked them concerning the service quality they received, three building societies – Principality, Nationwide and Skipton – achieved a few of the highest scores.
Principality topped the charts having a customer score of 80%, Nationwide finished third having a score of 77% and Skipton finished sixth with 73%.
Principality customers liked the lender’s flexibility of payments, while Nationwide and Skipton customers gave top ratings for that clarity of the mortgage statements.
Should you receive a mortgage from a building society?
While building societies are capable of challenging for top devote the rates tables, they are able to also be very helpful to people who're concerned they might not be capable of getting a home loan, for example first-time buyers with small deposits and self-employed applicants.
As along with offering more deals at higher LTVs (particularly 95%), many building societies operate more manual underwriting methods. This means that an individual, instead of an automatic system, will appear at a customer’s mortgage application, potentially lowering the chance of the pc saying ‘no’.
Of course, a more manual approach means you will probably find the application takes longer to be processed, especially if you’re signing up to an inferior building society.