by Peter Jacobs
A new discount has been announced from Lloyds TSB for their current account holders if they take out a new mortgage with them.The deal announced means that if a customer has a standard current bank account and deposits at least £1,000 into it each month then they will earn a 0.2% discount off new mortgage products they take out with the bank.
This sounds great in practice and certainly if you are a loyal customer of Lloyds TSB and want to take out your mortgage with them then the discount is something that is worth having.
However not all their mortgage deals are the best on the market and certainly offset mortgage products allow you to offset any money in your account against your mortgage loan for interest purposes as well. As with any financial product you should look at the whole market using your own research as well as any price comparison websites to see what is on offer and the total cost of your loan. You may also get better deals from mortgage brokers or financial advisers who can do all the calculations for you.
Lloyds TSB Current Account Holders Discounts Explained
Here are some examples to show you how much the discount could save you.
For a 3.99% fixed rate repayment mortgage of £150,000 this would be reduced to 3.79% and LloydsTSB current account customers could save £197 in the first year and within two years the customer could therefore save £395. For a 3.99% interest only payment mortgage of £150,000 which would also be reduced to 3.79% a LloydsTSB current account customer could save £301 in the first year, and for the two years the customer could save £603.
So a discount worth having but there may be better deals in the market place as well as other products which may suit your needs. On the interest only option shown above some mortgage lenders are increasing the rates on interest only mortgages whilst leaving repayment rates at their current levels.
Of course Lloyds are saying wonderful things about this added discount and their head of mortgages says “Rewarding our current account customers by helping to reduce the costs of their mortgage payments is just one of the ways LloydsTSB will continue to deliver the best value mortgages and develop deeper relationships with our customers in these still challenging times.” which is great news if this is the avenue you want to go down with this loan.
As we say if you are a loyal customer and want a Lloyds TSB mortgage loan then any saving that is to be passed back to the customer is worth having but you should always shop around and use expert advice to find the right loan product for your own circumstances and look at the longer term rates such as the standard variable rate which the loan falls onto once any intial deal period lapses (and these variable rates are quite higher amongst some banks and building societies and not necessarily explicitly tied to the Bank of England Base Rate). Good news but only partly.
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