Why are the Island's mortgage rates so much higher than the UK?

Homeowners here spending up to £150 more a month on their mortgages

Homeowners on the Isle of Man are spending up to £150 more a month on their mortgages than those in the UK.

That's according to advisors, Financial Options, as the Island's housing market continues to face issues.

One provider, for example, will offer a rate of 5.01% on a £270,000 mortgage over 35 years at 90% loan-to-value to UK residents.

However, here the same provider's rate is 5.80%, meaning an extra £139.04 a month.

The average difference in monthly payments between five providers is £99.10, which is £5,946.48 over five years.

In the past few years we've seen rising rents, rising property prices and a lack of social housing as an example.

But for the first time, a locally-owned provider is now offering mortgages here.

Andy Bass is the Head of Sales at Conister Bank and has been explaining more about them:

How much of a difference could a locally-owned mortgage provider make?

Financial Options Owner and Business Development Manager Paul Chase, has been looking at the Island's housing market:

Manx Radio contacted the IOM Financial Services Authority for comment.

In a statement, it said: "Mortgage rates and pricing are not regulated by the Isle of Man Financial Services Authority.

"However, the Authority continues to monitor changes in mortgage fixed rates in the Isle of Man, including comparisons with equivalent UK rates, for banks that are branches of UK banking groups.

"Discussions have taken place with banks to understand the reasons for any variances, which are typically due to differences in banks’ funding models, cost bases and risk appetite, as well as competition in the market.

"It is therefore difficult to undertake a straightforward comparison with the UK, although we recognise that consumers will naturally look to do so.

"It is worth noting that this matter is not unique to the Isle of Man. 

"The Jersey Consumer Council undertook its own investigation in March 2024 and published a report on mortgage rates in June 2024, which considers issues of a similar nature."