by Mark Johnston
Should More Products Be Available for Existing Mortgage Customers?
Remortgaging can be a hassle but the good news is that mortgage rates are now at their lowest ever levels and by switching to a better deal, home owners could find their monthly repayments come down significantly, particularly if they have built up a decent chunk of equity in their home.
According to figures published by the Council of Mortgage Lenders (CML) remortgage lending had its best month in 5 months in April this year. A total of £3.4 billion was advanced those remortgaging, this was up 9.7 per cent on the amount advanced in March this year.
Recent independent analysis of the home loan market has found that it is now the most rewarding time to remortgage for six years.
It seems then that some lenders are increasingly offering better mortgage deals to existing customers, in a bid to stop them switching.
Meaning that lenders that are pulling out the stops to get their existing customers to stay loyal.
Some simply have different product ranges for new borrowers and for existing ones, some may waive or reduce the product fee for existing borrowers. The fact is each lender is different, depending on how much emphasis they are currently putting on keeping hold of their clients, or acquiring new ones.
One such lender is Nationwide building society and they are supporting both new and existing customers, regardless of the size of their deposit, with reductions across its fixed and tracker mortgage range.
All two year fixed rates available up to 60 per cent loan to value (LTV) will be cut by 0.10 per cent.
The range includes the Society’s lowest ever fixed rate deal which is a two year fixed deal up to 60 per cent loan to value (LTV) with £900 product fee and comes with a rate of just 1.84 per cent for existing Nationwide mortgage customers.
The building society is also reducing all 80 per cent loan to value (LTV) mortgage rates by up to 0.3 per cent and all 75 per cent loan to value (LTV) mortgage rates by up to 0.15 per cent. All two year and three year fixed rate 85 per cent loan to value (LTV) and 90 per cent loan to value (LTV) products will see a rate reduction of 0.05 per cent.
However this said, according to the Council of Mortgage Lenders (CML) lenders could do more to create innovative products for existing customers rather solely looking for new business.
The fact is whenever people talk about innovation they are usually talking about new products and new borrowers.
Some experts feel that innovation should not concentrate solely on new products but ‘bring that same creativity and problem solving to the back book as well’ and better focus on existing customers could also help restore lost consumer trust across the banking sector.
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