Jersey’s mortgage rates have been consistently higher than those in the UK, sparking concern among consumers and prompting our investigation, according top the island’s consumer council.

A statement from the body, accompanying a new report, says: 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 … 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 complaints from residents and a call for more transparency over mortgage rates, the Jersey Consumer Council has now sent an open letter on behalf of consumers to the six main mortgage lenders operating on the island – Royal Bank of Scotland International; Barclays; Skipton; Santander; HSBC and Lloyds.

The body’s report speaks of “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.

But the consumer group notes that “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 is now demanding 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.