Money: How to net the best home loan
Compare mortgages in minutes on the Web - there's even a handy little calculator, writes Stephen Pritchard
Building societies and other lenders are using the Internet as a simple and effective form of publicity. Finding that good mortgage deal is simpler now that most of the large lenders have websites, as do some of the smaller local societies and direct lenders.
Comparing the cost of deals takes a few minutes on line. The websites make this easier with mortgage rate calculators - little programs that let would-be borrowers put in the sum they need and the interest rate and select a mortgage with or without tax relief. A few seconds later the building society's computer comes up with a monthly figure - more meaningful than the APRs and typical examples in the literature. It lets you try different combinations of deposits and borrowing and to second- guess rate rises.
Nationwide's website has a very comprehensive calculator giving typical costs for life cover as well as monthly prices for its buildings and contents insurance. Clicking a button selects the society's fixed-rate, variable or capped deals. The one drawback is that the service is limited to Nationwide's current rates - the site cannot work out a doomsday scenario of, say, rates at 12 per cent.
MoneyWeb's information on mortgages and house buying is a good starting point for the cautious or pessimistic. Its interest calculator accepts any rate, and automatically produces a cautionary monthly figure for lending at 12 per cent.
Direct lenders are also on the Web: their lack of a branch network arguably makes the Internet even more important as a form of distribution. Bradford & Bingley's Web pages cover the building society's branches, but a separate section deals with its direct sales arm, including a direct mortgage. Direct Line has a humorous Web site covering all its products, including mortgage offerings, and there is the ubiquitous monthly rate calculator.
Alliance & Leicester has a mortgage rate calculator, too, but it goes a step further with its budget page. Feed in your mortgage, and other outgoings for pensions, bills and council tax, and A&L will tell you how much there is left each month. The net result is often to make you feel poorer than you thought you were, but it is a useful exercise when shopping for a house loan.
The most interesting lenders' sites are those that go beyond simply publicising their mortgage deals. Tips on house-buying feature strongly on building society Web pages, and some of it is solid advice. Nationwide, for example, has a page on "finding the perfect home", with suggestions on searching, advice on how to make an offer and a checklist of features house buyers should consider when they view properties.
Price is the important factor for most people. What sets Halifax's website apart is the Halifax House Price Index. The lender's data on house prices is often reported in the media, but the website gives a detailed picture of quarterly and annual prices, by area and over time. The site shows that the "standard price" for a house in North-west England, for example, in the last quarter of 1997 was pounds 67,508, a fall of one per cent on the quarter, and a rise of just 0.4 per cent over the year. The standard price for an average home in London was pounds 93,956, a rise of 15.2 per cent on the year.
The Halifax's site also shows, for example, that the average price for a terraced house in London, built between 1919 and 1945, is now pounds 97,701. There's no guarantee that this sort of information will stop estate agents from describing over-priced hovels as palatial bargains, but at least it puts their glossy particulars into context.
q Contacts: MoneyWeb: www. moneyweb.co.uk/products/ mortgages/emort1.html (MoneyWeb also provides links to national and regional lenders' sites); Alliance & Leicester: www.alliance-leicester.co.uk; Bradford & Bingley: www. bradford-bingley.co.uk; Direct Line: www.directline.co.uk; Halifax: www.halifax.co.uk; Nationwide: www.nationwide.co.uk.
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