BANKS have beaten building societies to offer the best value mortgages during 2005, new research showed.

Financial research firm Defaqto said HSBC was the cheapest overall mortgage provider during the year, followed by Intelligent Finance.

But the group, which looked at the standard variable mortgage rates offered by the top 30 lenders, said Nationwide Building Society came in third place, followed by building societies Skipton and Britannia.

It found that someone who took out a £50,000 interest-only standard variable mortgage with HSBC would pay £2,833.56 during the year.

This was £102.40 cheaper than if he or she had taken out the same loan with Intelligent Finance and £144.73 less than on offer at Nationwide.

The mortgage also cost £574.66 a year less than one offered by Bank of Scotland, which was the most expensive lender the survey looked at.