The best and worst: Mortgages

Which Mortgage? magazine has evaluated mortgage lenders for long-term value. It asked more than 100 of them to supply figures for the cost of loans of pounds 30,001, pounds 60,001 and pounds 100,001 over both 12 months to the end of May 1992 and five years to the end of May 1992.

Lenders had to quote the total gross interest payments on an endowment loan, excluding first-time buyer discounts. Less than half supplied figures, so those appearing at the bottom of the league tables may not be the most expensive in the market.

Abbey topped the table for a pounds 100,001 loan over five years, its charges being pounds 8,500 cheaper than those of the Edinburgh-based Century building society. Abbey came fourth in the five-year league table for a pounds 30,001 loan. Century came bottom of the league tables over one and five years and for all sizes of loan. Its mortgage rate is 11 per cent - higher than most. It has a 'flexible' lending policy, sometimes accommodating borrowers who might elsewhere be deemed a risky proposition.

Household Mortgage Corporation relies solely on wholesale money markets to fund its loans. Over the past five years this has been a more expensive source than drawing on savers' deposits.

Jeff Wagland, HMC corporate affairs manager, said that many borrowers had been given fixed- or capped-rate deals so would not necessarily have paid the amounts indicated by Which Mortgage?

UCB, owned by two French mortgage lenders, also relies on the wholesale money markets.

----------------------------------------------------------------- MORTGAGES ----------------------------------------------------------------- The best pounds 1 Abbey National. . . . . . . . . . . . . .36,253 2 Principality Building Society. . . . . . 36,506 3 Woolwich Building Society. . . . . . . . 36,732 4 Progressive Building Society. . . . . . .36,895 5 Chesham Building Society. . . . . . . . .37,282 The worst 37 Scarborough Building Society. . . . . . .39,097 38 UCB. . . . . . . . . . . . . . . . . . . 39,202 39 Harpenden Building Society. . . . . . . .39,257 40 Household Mortgage Corporation. . . . . .39,480 41 Century Building Society. . . . . . . . .41,138 ----------------------------------------------------------------- Cost of pounds 60,001 endowment mortgage (before tax relief) 1 June 1987 to 31 May 1992, assuming 89.9 per cent advance, including discounts made available to all borrowers but not first-time-buyer discounts ----------------------------------------------------------------- Source: Which Mortgage -----------------------------------------------------------------