Halifax offers mystery mortgage rates

By Neil Simpson
Updated: 11:47 EST, 15 February 2011

 

Would you apply for a mortgage without knowing what the interest rate is likely to be?

Halifax is hoping that you might. It no longer publishes the rates it charges to non-customers who don't apply for one of its current accounts.

Take a look at the bank's newspaper adverts or website and every one of the dozens of fixed-rate and tracker deals listed applies solely to current account customers.

If you don't open a Halifax account – and pay in at least £1,000 a month – you can't get any of the bank's flagship deals.

Nor can you go online to find out what rate you might pay instead. The Halifax website makes it clear that these rates are given out only by phone or if you visit a branch in person.

The state-backed bank says that its dual-rate policy is designed to emphasise the rewards it offers to loyal customers rather than to confuse potential newcomers.

But while Halifax is far from the only major bank to offer different rates depending on whether borrowers have current accounts, it is the only one that is currently keeping these different deals under wraps.

Rivals HSBC and NatWest list all their rate and fee combinations side by side on their websites. Go for a 3.49% two-year fix with HSBC and you'll have an extra £300 added to your booking fee if you don't take out one of the bank's premier accounts, for example.

Choose a 2.39% two-year tracker with NatWest and you will pay a £999 fee rather than going fee-free if you don't take out one of its premium current accounts.

Several other banks and building societies charge higher rates rather than higher fees to customers who don't take out their current accounts – but again they publish both rates on their websites.

Interestingly, most brokers say the lack of transparency at Halifax isn't the only reason to think twice before choosing it for a mortgage. None of the rates it does publish makes it into the latest best-buy charts for fixes, trackers or first-time buyer loans.

So the hidden rates it offers to its non-current account borrowers, likely to be around 0.2% higher, will probably be particularly uncompetitive.

This month our independent analysis shows that whichever current account you hold, the best lenders to consider for fixes include First Direct, Santander, Skipton Building Society and Woolwich, while the best for trackers include HSBC, ING Direct and Northern Rock.

Good choices for first-time buyers currently include First Direct and HSBC as well as Britannia and Yorkshire building societies.