Moneyfacts.co.uk. the financial information web site has published figures that show that the state funded banks are charging taxpayers higher than average mortgage rates. The website says that it believes that these banks are placing a higher priority on exiting state ownership rather than charge competitive rates to the taxpayers who helped bail them out. RBS has been the most competitive while the others like Halifax, Northern Rock and Cheltenham and Gloucester are struggling to keep up.

The survey covered the period March 2009 - March 2010 and found that RBS offered a two-year fixes in the range of 3.27 percent to 4.04 percent while the others had at times charged in excess of five percent .Michelle Slade, the Moneyfacts spokesperson, said that taxpayers had hoped that these banks rescued at their expense would help to lead the unlocking of mortgage markets but this is not the case.

Meanwhile, two new fixed-rate mortgage packages unveiled today show that the trend of falling fixed rates continues. The Co-Operative Financial Services is offering a two-year fix at 3.19 percent, among the best in the market. The deal has an LTV of 75 percent and a fee of £999 and is available both from the Co-Operative Bank and Britannia. It is also offering a two-year fix at 4.49 percent for an LTV of 85 percent, again the lowest in the market in that LTV range.

Darren Cook, Moneyfacts.co.uk, spokesperson said: “It’s good to see new products being brought into the market and there is a growing sense that competition is returning. The drop in the average mortgage rates since the beginning of the year shows that rates are coming down. It is a year since the base rate was cut to 0.5%, and it has taken that long for lenders to reassess risk, but although mortgage rates are coming down, this is at the expense of saving rates.”

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