Cost of Standard Variable Rate mortgages in 2008

First direct, Direct Line and HSBC led the pack in offering the cheapest Standard Variable Rate mortgages during 2008. In the mutual sector the Nationwide and the Skipton Building Societies were the cheapest and occupy fourth and fifth places respectively according to Defaqto's annual survey of the largest lenders.

The research was based on the amount of gross interest payable during 2008 on a £100,000 interest-only mortgage provided by the top lenders, as defined by the Council of Mortgage Lenders for 2007. In order to provide a level playing field for comparisons, specialised providers were not included.

Standard Variable Rate borrowers with First direct paid £5,918.16 in 2008, which was an astonishing £1,468.42 cheaper than the most expensive standard variable rate deal.

Commenting on the results, David Black, Principal Consultant of Banking at Defaqto said, "The recent turmoil in the financial markets has meant that Standard Variable Rates have taken on a much greater significance than in previous years as the availability of attractive remortgage deals for many borrowers has been in short supply. This is particularly the case for those with high Loan-to-Values as the best new deals tend to be restricted to those seeking mortgages for no more than 60% Loan-to-Value."