A quarter of mortgage products for current customers only

More that 25 per cent of current mortgage deals can be used only by lenders' existing customers.

In spite of the encouraging news about a substantial increase in the number of mortgage products available on the market  (nearly 3,000 now compared to only 1,700 last July), Defaqto,  a financial research company,  estimates that more than 700 of them are not available to new customers.

Kevin Bray from Defaqto comments that while it is not surprising to see about 10% of mortgages available to lenders’ existing mortgage customers, the recent move by the major lenders to bring about new mortgage products restricted to their current account holders was unexpected.

It is obvious that loan providers have the aim of extending their ambitions of turning into one-stop shopping place for all the financial needs of their account holders. Launching a great number of new mortgage deals to their existing customers is certainly an important part of such a strategy.

The rate of the average new mortgage product currently on offer is 0.05%-0.20% lower than the lender’s usual mortgage range. Some lenders reduce their fees and others allow higher loan-to-value borrowing than usual.

Loan providers launching mortgage deals specially designed for their existing customers include Alliance & Leicester Direct, Halifax, Lloyds TSB, Lloyds TSB Scotland, Nationwide Building Society, NatWest, etc.
 


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