It is a very fine line to tread for the State Owned Banks, do they offer financial assistance in the form of mortgages at cut rates to lenders in a bid to re-vitalise the property market as requested of them by the UK Government, or should they protect the tax payers interest by offering deals at interest rates higher than their competitors.
It is an argument that is currently raging in financial circles following statistics revealed by MoneyFacts this week after conducting a comparison of interest rates currently on offer from the UK’s biggest lenders.
Basing their research on a two-year, fixed-rate deal for someone able to put down a 25 per cent deposit on a home, MoneyFacts found that Cheltenham & Gloucester, part of the Lloyds Banking Group, charges 4.57% compared to a UK average of 4.19%.
Northern Rock which has 100% Government backing came in second place offering their services at 4.37%, and in third place was the Halifax, another Lloyds lender charging 4.27%.
The only Government supported lender that came out of the poll smelling of roses was the Royal Bank of Scotland, where the average rate for a two year fixed mortgage is shown as being 3.84%.
The lenders involved made a case for themselves by explaining that they each offer a wide variety of mortgages that offer substantial discounts to lenders meeting certain criteria.
But should these banks be seen as being more competitive in a market that almost caused their downfall, the argument is that having taken the tax payers backing the banks priority is to build up their balance sheets in order to repay the funding and show that they can stand on their own two feet.
The argument goes on.
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