25% of mortgages restricted to existing customers

Research from Defaqto shows that while the number of mortgage products available has increased to 2,948 from only 1,686 in July 2009, over a quarter of the mortgages available are restricted to the lender’s existing customers.

There are currently 282 mortgages that are restricted to lenders’ existing mortgage borrowers and 444 restricted to a lender’s current account customers, 25 to existing members and five to existing savers, in total there are 757 restricted mortgages out of the 2,948 deals on the market.

Kevin Bray, Insight Analyst for Banking at Defaqto says: “While it is no surprise to see that almost 10% of mortgages are restricted to lenders’existing mortgage borrowers, there has been a noticeable move by the major lenders to launch mortgage deals that are only available to their current account holders.”

He adds: “The banks are clearly keen to further their ambitions of becoming one-stop shops for all their customers’personal financial product needs and offering special mortgage deals to their current account customers is a definite part of this strategy.

“The typical deal available has a rate that is between 0.05% and 0.20% cheaper than the lender’s standard mortgage range. In some cases there are reduced fees and others permit higher loan-to-value borrowing than their standard range.”

Lenders offering special mortgage deals to their current account customers include Alliance & Leicester Direct, Halifax, HSBC, Lloyds TSB, Lloyds TSB Scotland, Nationwide Building Society, NatWest, Norwich and Peterborough Building Society, Royal Bank of Scotland, Santander, The Co-operative Bank, Ulster Bank.