Save money with the right lender

Homeowners could save over ?8,000 in the first 10 years of their mortgage simply by choosing the right lender, according to a new survey.

The research, carried out by What Mortgage magazine, also found that more than ?21,000 could be saved over the traditional 25-year term. And building societies fare better than banks when it comes to value for money, with a Cumbria-based lender with just two branches coming out cheapest.

Over 10 years, borrowers with Penrith building society would pay ?59,752 in interest on an ?80,000 loan. That's ?500 less than second-placed lender, Chorley and District building society, and more than ?8,000 less than borrowers with the most expensive lender, Capital Home Loans.

The survey calculated the cost of an ?80,000 interest-only mortgage from every lender in the UK, using lender's standard variable rates (SVR) and including any loyalty bonuses.

First Direct emerged as the top national lender over 10 years for the second-year running.

While this time last year only one in six borrowers had at some point switched home loans, pundits' recent predictions of interest rises by the end of the year are causing many people to consider remortgaging to a fixed rate deal.

A major catalyst for interest rate rises are house prices - despite speculation throughout 2001 that they would level off, they have in fact continued to climb.