Mortgage and Current Accounts

Aid2807

Hello,

I am looking at mortgage providers and scouring the market for best rates etc. However, from friends and colleagues I have heard that certain bank branches stipulate you must primarily bank with the provider in order to draw down the mortgage. Has anybody else encountered this and is this legal? May be codswallop but just wondering if any other mortgage hunters have found this.

Many thanks.

R_P_W

some lenders may have preferential rates for existing customers, but generally you can apply with any lender you want!

What do you mean is it legal?

kkgree1

We did this in order to get the best tracker deal at the time.

It was with Britannia and was sold as a deal for existing customers. We had to complete the switch-over to Co-op current accounts before we could get our mortgage application started.

It is also a condition that for the lifetime of the mortgage that it is paid from the same bank accounts. Most people don't believe us when we say this including one Natwest employee who said it was illegal! It's not but it does mean you can't take advantage of moving current accounts e.g. the £100 Halifax offer!

We are very happy with Britannia/Co-op though and I would do this again but only for the right deal!

harvey115

its not illegal its business offer, so you agree with the best rates but do not agree with the terms?

Aid2807

Thanks for your comments.

What it is that I know of people who are being told in branches that unless they switch to that provider for their bank account they will not approve a mortgage. I know banks offer incentives/promotions and want the full relationship with the customer but just thought this was somewhat strange that they would not approve a mortgage on this premise.

I am currently happy with my current account but mortgage rates are better elsewhere. It seems to be branches disgression on this as applying on telephone and internet it is not stipulated.

Thrupnybit

Britannia has a tracker mortgage at the moment, Bank of England base rate + 2.99% (I think) but you have to have your current account with Co-op Bank or Smile. My sister is going for this as her current mortgage is with Britannia, been very problem free and she reckons the hassle of moving current account is worth it for the benefit of staying with current provider who knows her circumstances. It looks like a good option all round, not least with very good feedback on both Britannia and Co-op Bank.