Britain’s best and worst mortgage lenders, according to their customers

The best and worst mortgage lenders in Britain have been revealed in a poll voted on by their customers.

Consumer website Which? has published the results of its annual lender survey, where it asks mortgage holders to rate them on their customer service and value for money.

It also takes into account which providers offer the cheapest deals.

Britain’s biggest mortgage lenders have been ranked best to worst in a new report by Which?

First Direct took the top spot this year, receiving a score of 81 per cent.

Which? said its customers awarded it five stars across all the scoring categories, and that it ‘consistently offered some of the cheapest deals on the market’.

Nationwide Building Society came in second place with an overall customer score of 77 per cent, achieving five-star ratings for value for money and for the clarity of its mortgage statements.

Both were named ‘Which? Recommended Providers’ – the only two lenders to achieve this – with Nationwide getting the stamp of approval for the eighth year in a row.

Coventry Building Society’s customers gave it a top approval rating of 81 per cent, jointly with First Direct – but it lost its Which? recommendation crown, which it was given in 2020, because it did not offer enough market-leading mortgage deals. 

Skipton Building Society also received a high rating of 79 per cent, but as a smaller lender this was based on only 41 customers.

Nationwide was the second highest-ranked lender in the Which? mortgage survey, and one of only two to receive 'recommended' status from the consumer website

Nationwide was the second highest-ranked lender in the Which? mortgage survey, and one of only two to receive ‘recommended’ status from the consumer website 

Royal Bank of Scotland received the lowest score in this year’s survey, with an overall customer score of 64 per cent.

RBS received three stars for its general customer service, flexibility of payments and online access, among other criteria.

RBS is part of Lloyds Banking Group, which is the UK’s largest lender providing nearly 20 per cent of all UK mortgages under the Lloyds, RBS and Halifax brands.

Asked for its response to the news, an RBS spokesperson told This is Money: ‘We can do more to improve the experience for customers in certain aspects of our service.

‘We’re investing in dedicated teams focussed on making targeted improvements for customers in order to address the areas where our service falls short of expectations.’

Lender name  Customer satisfaction rating  (%) Stars out of 5 for customer service 
Coventry BS 81
First Direct   81 
Skipton BS  79  (not enough data) 
Nationwide  77 
NatWest  73 
Leeds BS  73 
Barclays  72 
HSBC  71 
Lloyds  71 
Santander  71 
TSB  71 
Co-operative  71 
Halifax  70 
Virgin Money  70 
Accord  66 
Royal Bank of Scotland  64 
Source: Which?
Names in bold are ‘recommended’ providers 

Halifax was also among the poorer performers, with a score of 70 per cent making it the fourth worst-rated.

The bottom three was completed by Virgin Money and Accord Mortgages, which is part of Yorkshire Building Society.

Making up the middle of the table were NatWest and Leeds BS, which received the overall average rating of all lenders at 73 per cent.

Barclays came next with 72 per cent, followed by HSBC, Lloyds, Santander, TSB and the Co-operative which all scored 71 per cent.

Some lenders are missing from the table because the survey did not take in enough of their customers to make the numbers meaningful. 

For example, Family BS, Atom Bank, Kensington and Chelsea BS all scored sub-60 per cent approval ratings last year, but did not figure in this year’s results. 

Principality BS topped last year’s customer service rankings, though was not Which? recommended. 

Lenders were scored on various factors including keeping customers informed, clarity of mortgage statements, transparency of charges or penalties, dealing with queries and complaints, flexibility of payments, online access and value for money.

With interest rate rises on the cards for the end of the year, monthly payments are set to increase for most borrowers when their fixed terms come to an end and they remortgage or go on to their lender’s standard variable rate.

It is therefore more important than ever that borrowers choose the right mortgage deal and lender.

How do I pick a mortgage lender?  

Those seeking a new mortgage deal are usually motivated by the cost, rather than the lender that they are borrowing from.

However, there are several factors to think about when deciding which lender to choose.

As the Which? survey shows, the levels of customer service provided can vary – so looking at surveys like this one, as well as online reviews and seeking recommendations from people you know can be helpful.  

Some lenders might give better deals to existing customers, for example, while others might be more suitable for people in certain circumstances such as being self-employed.

It can often be easier for borrowers to get a mortgage with a smaller building society rather than a big-name bank, because of differences in the way they assess borrowers’ financial circumstances.

However, larger, household name banks are often able to offer the very cheapest rates, and may have a wider range of products.

It might also be worth working out whether a lender has a branch in your area, if being able to make appointments in person is important to you.

While nearly nine in 10 of people said they were satisfied with their mortgage provider, a quarter said they had had a problem.

The most common issues were poor customer service, a lack of flexibility on payments and poor interest rates.

When asked why they chose a lender, around one in five of respondents said the size of monthly repayments was important, while the same number said the overall cost of the deal was key.

You can compare mortgage deals using the This is Money mortgage service, and work out what your monthly, annual and overall costs would be using our mortgage calculator.

A quarter of mortgage customers said they had a problem with their lender's customer service

A quarter of mortgage customers said they had a problem with their lender’s customer service

One in six of respondents said an existing relationship with the lender (for example, having a bank account with the provider) was a key factor.

Seven in 10 of survey respondents had a capital remortgage payment plan. However one fifth had interest-only mortgages.

While the majority of respondents with interest-only mortgages had a plan for repayment at the end of the term, worryingly 9 per cent said they did not know how they would repay their loan – meaning they could be forced to sell their home at the end of the term to repay the balance.

Which? surveyed more than 3,500 people with mortgages in July 2021, and analysed the cost of different mortgages between July and August 2021, to come up with the rankings.

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