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first direct, the UK's most recommended bank, has been named best direct mortgage lender for 2005 by What Mortgage? Magazine for the fifth year running.

What Mortgage? has also named first direct the UK's second best value mortgage lender, ahead of every other bank, building society and broker in the country except the Stafford Railway Building Society. It is also the only offset mortgage provider in the list.

The What Mortgage? awards recognise good deals over the short and long term, judging lenders on the cost of their mortgage based on their standard variable rate (SVR) over two, five and 10 years. A first direct mortgage costs less than any other direct provider over 10 and two years and came a close second to Egg in the five year category.

A first direct mortgage customer would save £2,422 on their mortgage over a decade compared to a customer of the tenth best value mortgage lender, the Ecology Building Society. The savings would be far greater when compared to the major high street banks - except for first direct's parent, HSBC, the only other bank in the top 10.

Richard Kimber, first direct's chief executive said: "Winning the direct lender award and coming second overall reinforces that first direct offers award-winning value for money, over both the short term and importantly, the life of a mortgage.

"We won this award based on our SVR, but the first direct mortgage looks even better once the benefits of offsetting - which enables customers to clear their home loan quicker and for less - are taken into account. Beaten only by the Stafford Railway Building Society, you could say we're chuffed."

first direct's offset mortgage enables customers to set their credit balances in savings and current accounts against their mortgage, so a customer with a £100,000 mortgage and £10,000 in savings would pay interest on only £90,000. This means that credit balances are effectively earning interest equivalent to the mortgage rate, which is higher than most UK savings accounts offer.

The mortgage is designed to be entirely flexible, so it can be arranged for up to 95% of a property's value, can be capital repayment or interest only, variable or fixed, and allows unlimited overpayments and capital repayment holidays. The rate is currently discounted to 4.99%, reverting to the SVR of 5.75% after three months or fixed for three years at 5.49%.

For more information about first direct's mortgage customers can log on to www.firstdirect.com or call 0800 24 24 24.

Notes to editors:

1. What Mortgage? awards
   What Mortgage? awards are based on the standard variable rates charged by each lender on a £100,000 interest-only mortgage over two, five and 10 years. This information is compiled by Network Data.

   The total cost of first direct's mortgage over the past 10 years was £64,139.03, second - by less than £800 - only to the Stafford Railway Building Society.

2. first direct
   first direct has been the UK's most recommended bank, and has had the most satisfied customers, for the last 13 years consecutively (which is when the research began), according to research from MORI and Research International.

   The reasons first direct's new customers gave for joining in 2004 were:

   • 37 per cent following a personal recommendation
   • 37 per cent due to dissatisfaction with their previous bank
   • 36 per cent to benefit from 24 hour banking
   • 32 per cent to benefit from internet banking
   • 17 per cent to benefit from text message banking.
   (There are multiple reasons per customer)
   
   
3. The HSBC Group
   first direct is a division of HSBC Bank plc, and a member of the HSBC Group. Serving over 110 million customers worldwide, the HSBC Group has over 9,800 offices in 77 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$1,277 billion at 31 December 2004, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.

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