Free buyers' guide to Mortgages, from Ethical Consumer.

Free buyers' guide to Mortgages, from Ethical Consumer.


This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

It's time to bank on something better and move your money. This buyers' guide is part of a Special Report on Banking.  See what's in the rest of the report.

 

In this guide:

  • ethical ratings for 48 mortgage providers
  • Best Buy recommendations for most ethical mortgages
  • banks and the arms trade
  • green mortgages
  • switching mortgages

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Score Ratings

Our ratings are live updated scores from our primary research database. They are based on primary and secondary research across 23 categories - 17 negative categories and 6 positive ones (Company Ethos and Product Sustainability). Find out more about our ethical ratings

 

Score table

The score table shows simple numerical ratings out of 20 for each product. The higher the score, the more ethical the company.

Move the sliders to customise these scores. 

Click on a product name to see the stories behind the score (subscribers only). 

 

Full Scorecard

The Full Scorecard shows the 'black marks' for each product, by each of the 17 negative categories. The bigger the mark, the worse the score. So for example a big black circle under 'Worker Rights' shows that the company making this product has been severely criticised for worker abuses.

Scores start at 14.  A small circle means that half a mark is deducted, a large circle means that a full mark is deducted.

Marks are added in the positive categories of Company Ethos and the five Product Sustainability columns (O,F,E,S,A).  A small circle  means that half a mark is added, a large circle means that a full mark is added.

The Full Scorecard is only available to subscribers. Click on the More Detail link at the top of the score table to access it.

 

Customising Rating Scores

Move the sliders to change the weighting given to each category. You can open up each of the 5 main categories by clicking on the + sign. This way you can compare products according to what's ethically important to YOU.  

 

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Stories and Data behind the scores

To see all the stories and research data behind the ratings you'll need to be a subscriber.

You must be signed-in to save your customisations. The weightings you have given to each category will be saved premanently (subscribers) or only for this visit to the site (registered users).  Once set, they will be used to calculate the scores in all the buyers' guides that you view. 

 

Stories and Data behind the scores

To see all the stories and research data behind the ratings you'll need to be a subscriber.

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Key to expanded Score table

Best Buys

as of February 2012

As our ratings are constantly updated, it is possible that these companies will not always come out top on the score table.

Ecology Building Society is a clear Best Buy but may not be appropriate for all types of mortgage.

Good alternative options for mortgages include:

a) any of the mutual building societies listed here, or one of the smaller building societies or credit unions

b) mortgages from the Co-operative Bank and Britannia because of their campaigning ethical stance

Ethical Business
Directory Links

  • Ecology Building Society    view ethical directory profile >

    Not all financial institutions are the same - we are a building society with a difference. When you place your savi...


 

Bank on something better

 

The Ethical Consumer research team looks at mortgages without ethical compromises.

 

Banks and the arms trade
 

Mortgages are usually the biggest financial ‘product’ that most people ‘buy’.  As such they can be particularly lucrative for the banking industry – giving them ever more resources to invest in problem areas around the world.

One particular target area for civil society criticism has been the role big banks play in financing arms manufacturers and their international transactions.  For some people Santander, a relatively new player in the UK market, is not necessarily immediately associated with these kinds of issues.  However there is now a new Spanish website detailing its extensive investments in “bombs, missiles, nuclear weapons and depleted uranium.”

As the full score card shows (click on 'More Detail'), none of the big five lenders have chosen to avoid offering finance in this – and many other areas – for ethical reasons.

 

 

Switching mortgages


It is possible to switch mortgage provider in the middle of a mortgage period.  Normally this is done for financial reasons, but could be done for ethical reasons too.  It may involve up-front costs such as having a property surveyed again.

Which? suggests that people should seek professional advice before they take on a new mortgage or make a decision to switch.  They have their own mortgage advice service, or suggest that an independent one can be found at unbiased.co.uk.  Many of the most financially rewarding deals available though are only available by going to a lender direct.
Whether switching, or as a first time buyer, ordinary repayment mortgages are always best from an ethical point of view.  Interest-only or ‘endowment’ mortgages, of which there has been much mis-selling in previous years and which rely on stock market investments, will always be problematic ethically – as well as risky financially.

Which? top six recommended mortgage providers for value and service in January 2012 were:  First Direct, Co-operative Bank, Yorkshire Building Society, Britannia, HSBC and Nationwide.

 

 

Green mortgages


Since we last reviewed mortgages, specifically green mortgage products from the Co-operative or Norwich & Peterborough are no longer available.  This leaves the field open for the excellent Ecology Building Society (EBS).

The EBS provides mortgages which promote sustainable housing and communities. This might be through energy-efficient housing, ecological renovation (recycling) of run-down properties, small-scale and ecological enterprises or low-impact lifestyles. Its innovative C-Change scheme offers home-owners discounts off their mortgage rates for energy-efficient homes — the higher the energy rating, the higher the discount.

It has also recently launched mortgages for energy-saving improvements in existing homes.  These might include installing insulation or renewable generation technologies.
They are also a mutual society which you allows you to become involved in the direction of the organisation.

 

 

Other building societies


Nationwide Building Society
is the UK’s biggest – with more than four times the assets of its nearest rival. It receives a worst ECRA rating for environmental reporting and has subsidiaries in two tax havens.

Yorkshire Building Society now owns Barnsley Building Society, Chelsea Building Society and Norwich & Peterborough Building Society.  It picks up a mark from Norwich & Peterborough which was found to have mis-sold investments from Keydata in 2010.(1)  It closed down its Guernsey subsidiary on 2010.

Newcastle Building Society loses marks for its tax haven operations and its poor environmental reporting. Skipton Building Society also has a subsidiary in Guernsey, a tax haven.

Coventry Building Society, Cumberland Building Society, Principality Building Society, Skipton Building Society, and West Bromwich Building Society, all lose one mark for scoring worst on environmental reporting.

 

 

Mortgage Facts

 

  • The banking crisis has seen net mortgage lending fall by 93% between 2007 and 2010.
  • The average deposit required by lenders has increased from 17% in 2007 to 27% in 2010.
  • The top six mortgage providers (big 5 plus nationwide) accounted for 72% of all mortgage lending in 2010.

Source: Mintel Mortgages April 2011

 

 


 

It's time to bank on something better and move your money. This buyers' guide is part of a Special Report on Banking.  See what's in the rest of the report.

 


 

 


 

References 
1 BBC News Website 19/8/10 Keydata: Couple win compensation from building society.

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