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Banks found to offer cheapest mortgage rates

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Banks offered the cheapest standard variable mortgage rates in 2006, according to the latest figures, in news that is sure to interest homeowners across the UK.

According to an independent financial study from research company Defaqto, the cheapest mortgage rate offered in 2006 for existing borrowers with a �50,000 loan came from HSBC, which offered interest costs of �2,888.01.

Meanwhile, Intelligent Finance, which is an internet and phone-only division of HBOS, came in second in the study with interest of �2,918.08.

However, the survey found that homeowners who chose the least competitive standard variable rate were paying �493.63 extra per year on the same mortgage.

David Black, head of banking at Defaqto, said that the research underlines the importance of comparing mortgages.

While it is recognised that standard variable rate mortgages are only one type of mortgage, they can represent an important benchmark in competitiveness, he said.

This demonstrates why borrowers must take the time to check.

Typically, mortgages revert to standard variable rates after the expiration of an initial limited-term mortgage rates offer.

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