Higher interest rates undercut the savings available on mortgages but ISAs and deposit accounts are winners

April 27th, 2007

Moneyextra.com's latest quarterly review of financial services highlights the savings available just by making the right financial decisions.

Rising interest rates have seen mortgage lenders squeeze the best deals out of the housing market. The total annual savings now available by replacing near-worst with near-best products across a range of financial services is £4,327.78¹. That's down £350.82 on the savings available three months ago.

Mortgages account for all and more of the total fall in potential savings as the most competitive fixed rate deals have been withdrawn. The annual savings now available on the average mortgage amount to £2,832, down £355.80. Personal loan rates have also been squeezed in the last three months and term assurance has become marginally more expensive.

However, on the plus side, higher interest rates have also meant there are better bargains to be had for those looking to save money. The best performing deposit accounts, current accounts and cash Individual Savings Accounts all reflect increased interest rates and offer better returns than they did in the first quarter of the year.

Robin Amlôt of Moneyextra.com commented, "It's hardly surprising mortgage deals are being squeezed but there are still bargains to be had. With the prospect of higher interest rates still to come, anybody on a standard variable mortgage rate really should be shopping around for a better deal."

Making sure you have the right mortgage is the cornerstone of a fitter, fatter wallet, with the potential savings from the right decision here accounting for 65 per cent of the total savings to be made.

Those with savings could find themselves more than 10 times better off! With £5,000 in an instant access savings account, the difference between near worst and near best accounts is £265 in interest - more than 10 times the £25 being offered at the bottom end of the scale.

Elsewhere, Moneyextra.com's figures also show that picking the right cash ISA could add more than 50% to the amount of interest you earn. The difference between best and worst for a £3,000 instant access ISA is £62.70, well over half the interest being offered by the poorest performer.

 

For further information, please contact:

Robin Amlôt
Senior Editor, Moneyextra
Tel: 0870 191 5626
public.relations@moneyextra.com

 

NOTES TO EDITORS

About Moneyextra.com

Moneyextra.com is one of the UK's longest-established personal finance websites. It has 536,000 unique users and delivers 5.5 million page views every month and has 513,000 registered users.

As at 22nd March 2007, Moneyextra.com featured:

• More than 10,000 Mortgages from 126 providers
• 161 Personal Loans from 69 providers
• 205 Credit Cards from 64 providers
• 1,506 Stocks & Shares ISAs from 58 providers
• 173 Cash ISAs from 91 providers
• 123 Current accounts from 36 providers
• 858 Deposit accounts from 149 providers

¹ Moneyextra's Potential Savings Q2 2007

* Mortgage, card and loan figures based on average Moneyextra.com site usage during March 2007. The mortgage figure is based on difference between normal monthly payments and excludes any related fees. Card savings assume minimum monthly repayment is made. Potential savings in subsequent years may differ.

** Balance transfer fee only.

Products quoted are examples of 'near' worst to 'near' best products matching the criteria but always available nationwide without restriction and are from a similar target market. Full details of criteria used and of products quoted and rates of interest charged/offered are available on request.