Revealed: The Best and Worst Mortgage Lenders in the UK

Posted 4 November 2019 by Nick Parkhouse

Where should you go for your next mortgage? Here’s a list of the best and worst UK lenders based on rates and service...

With dozens of lenders in the mortgage market, it can be hard to choose who is the best bank or building society to approach for a home loan. Some lenders offer great service but uncompetitive rates. Others have great products but are difficult to deal with.

Now, the leading consumer organisation Which? has revealed the best – and worst – lenders in the UK. Keep reading to find out which banks and building societies to approach and avoid when it comes to getting a new mortgage.

Building societies lead the best mortgage lenders in the UK

A brand new survey of more than 3,500 people has revealed the best and worst mortgage lenders in the UK.

Consumer group Which? asked thousands of mortgage holders from first-time buyers to those remortgaging to rate their lender on a range of criteria including:

  • The application process
  • Online access
  • Complaints handling

Which? then analysed the deals on offer from each lender to establish a league table of those who lead on value for money as well as service. Experts then calculated a customer score for each lender, taking into account borrowers’ satisfaction with their lender and how likely they said they would be to recommend the bank or building society to a friend.

When combined with the information on interest rates, it gives a snapshot of which are the best lenders in the UK.

This year’s winner was Nationwide, where an impressive 93% of customers said that they were satisfied with their mortgage. The complete top five were:

1. Nationwide – 79%

2= Principality Building Society – 76%

2= Coventry Building Society – 76%

4. Skipton Building Society – 74%

5. Metro Bank – 73%

First Direct finished just outside the top 5 with a combined score of 72%.

Nationwide was one of only two lenders in the Which? survey to receive five stars for its customer service. Three in 10 Nationwide customers said its reputation was the reason why they took out a mortgage with the building society, and eight in 10 said they hadn’t experienced any problems.

One customer described Nationwide’s customer service as ‘polite, friendly and professional’, while another praised its online remortgaging service.

Ranking in joint-second place, Principality Building Society was the only lender other than Nationwide to receive five stars for customer service. The provider also received five-star ratings for its clear mortgage statements and the way it handles complaints and queries.

Coventry Building Society came joint second in the customer satisfaction survey. Nine in 10 customers found the lender was good at keeping them informed about their mortgage, with one Coventry customer describing how the lender seemed ‘keen to make sure [they understood] everything’ about their mortgage.

The UK’s worst lenders

According to the Which? survey, the UK’s worst mortgage lenders for service and interest rates are:

  • Kensington
  • Aldermore

Kensington was the only provider in the Which? survey to score just one star for its customer service. It also received the lowest rating of any lender for value for money, scoring just two stars.

During the research, the average two-year fixed rate from Kensington was 3.74%, compared to the industry average of 2.77%.

The average rate of a two-year fixed mortgage from Aldermore was also relatively high, at 4.39%.

It should be noted that both Aldermore and Kensington specialise in lending to people with unusual circumstances or low credit scores, and these types of mortgages often charge higher rates due to the increased risk taken on by the lender.

How to choose a mortgage lender

While this survey has outlined which lenders you may want to consider (and avoid), it’s important that you find the bank or building society that’s right for you.

Factors that will influence your choice of lender include:

  • Interest rate – what rates are available
  • Underwriting criteria – will the lender actually agree the mortgage you want based on your income, expenditure and personal circumstances?
  • Service – can the lender process your application in time and get you a mortgage offer within your timescale?
  • Existing relationship – if you have an existing mortgage then you may want to go back to your existing lender to avoid paying ‘early repayment charges’. Or, you may benefit from preferential rates or treatment if you have an existing financial relationship such as a current or savings account.

Speaking to a good independent mortgage broker can help you to find the most appropriate mortgage for you.

Not only will they review the mortgages available to you based on your personal finances, but they can also help you to find a lender prepared to agree your application. Additionally, they will help to manage the process, saving you time and effort.

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