We've published the Findings Report of our three-month investigation into higher mortgage rates in Jersey.
Jersey's mortgage rates have been consistently higher than those in the UK, sparking concern among consumers and prompting our investigation.
At the time of launching our investigation in March 2024, a number of banks were offering local rates at more than 1% higher than the UK equivalent. The gap has closed at the time of writing this report, although can change with very little notice. That said, even the smallest increase in mortgage rates have a significant impact on the total amount repaid, due to the size of the loan and the length of time it takes to be paid off.
Following correspondence from a number of Islanders, and a call for more transparency over mortgage rates from the property conveyancing sector, the Jersey Consumer Council sent an open letter on behalf of consumers in Jersey to the six main mortgage lenders in Jersey during March 2024. They were:
- Royal Bank of Scotland International
- Barclays
- Skipton
- Santander
- HSBC
- Lloyds
We then conducted a broad investigation into the reasons behind mortgage rates in Jersey being higher than those offered by the same branded banks in the UK.
We found this leads to confusion for consumers, who, along with already paying significantly higher prices for property compared to many parts of the UK, struggle to understand why they are being asked to pay up to £20,000 more per £100,000 of loan over the lifetime of a mortgage when borrowing over 25 years.
The banks attribute this difference to their status as ring-fenced and separate entities from their UK counterparts. Despite this separation, many of these banks still align with their UK outfit in terms of branding, marketing material, contact details and, most significantly, the offer of Jersey-based mortgage products which track the Bank of England’s base rate, and rates generally which fluctuate with the Bank of England interest rates.
The Consumer Council, however, has concluded that the elevated mortgage rates are further influenced by the higher savings rates offered in Jersey, which are designed to attract both local and inward investment.
The Council's findings highlight the need for greater transparency from the banking industry to help consumers better understand the differences, and a reassessment by the Government of Jersey on the balance between attracting inward investment and ensuring affordable home ownership for Islanders.