From Andrew Botte
Why do lenders give their existing customers such a raw deal?
I have recently had two prime mortgage cases, one with Abbey and the other with Alliance & Leicester.
The first case has been with Abbey for the past two years and come up for mortgage review.
The customer came in to see me for advice after being offered a new rate of 5.25%. This is despite Abbey offering new customers a rate of 4.88%. Is it just me, but if I was a director of Abbey I would back a proven payer every day of the week rather than push a customer away. The board of Abbey may be pleased to know they have pushed the customer in question all the way to Woolwich. Madness.
The second case was with Alliance & Leicester. The client had been a customer of Alliance & Leicester for more than 20 years with a peanut-sized mortgage balance of 2,000. Due to a marital breakdown she needed to raise 50,000 to buy out her partner.
Despite fitting the criteria with ease because of the extremely low LTV involved, the local Leicester branch of Alliance & Leicester offered its SVR of 6.89%. A logical offering? I think not.
Never mind though, I managed to get the customer in question a stonking five-year fixed rate with Bristol & West.
In times of rising repossessions and interest rate hikes, surely it would make sense for lenders to cherish their existing customers. Or am I just being old-fashioned?
Chase Evans HomeLoans Limited