Direct Line Mortgages

Choosing a mortgage lender is one of the biggest decisions you’ll make in your life. Get it wrong, and it could cost you dearly. Remortgaging has never been easier, and many lenders are desperate for new business, and will even poach from other lenders. That said, it is still time consuming to change mortgage lender, and not necessarily without a cost, albeit hidden.

So, it is important to get it right first time, and not rely on the fact that you can change lender part way through your mortgage. Four years ago I moved house and was looking for a lender. I shopped around (although without the luxury of the internet to take away the donkey work), and chose Direct Line.

I had two main reasons:

1. At the time they were offering a competitive interest rate, below many of the leading High Street banks and building societies. The current standard variable rate is 5.71% with some discounts available.

2. They calculate the interest on a daily basis, and allow you to repay more anytime you wish. Again, this was in place 4 years ago, long before some of the building societies were forced by consumer pressure to change the way they calculated interest.

Over the last four years, my mortgage rate has been reasonably competitive, and I have not judged it worth my while to consider changing. Their customer services staff are friendly and helpful, and I have no major complaints about my mortgage until now.

Prior to the interest rate cut of 0.5% announced recently, Direct Line’s standard variable rate was 5.96%. I checked on the internet yesterday, and it has now reduced to 5.71%. You don’t need to be a maths genius to calculate that they’ve reduced the mortgage rate by only 0.25%, NOT the 0.5% cut in interest rates. If other lenders have passed on the full interest rate cut, maybe Direct Line isn’t so competitive after all!