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Better deals only for new customers? Lloyds TSB
neverdespairgirl
Posts: 16,501 Forumite
We bought our flat at the end of May 2011, and took a 25 year long interest-only mortgage at a rate of 3.15% fixed until 31st May 2013.
The current payment is £1,186.22 a month (the interest part).
When we came to look at new fixes for Lloyds, we saw a 2 year fixed deal (until August 2015) at 1.89%, with a £2k fee, which would mean an interest payment of £709.50 a month, or £21,156 over 27 months including the fee.
However, the best 2 year fix for exisiting customers is 3.24% until August 2015, no fee. That would cost £1,216.28 a month, or £32,839.56 over 24 months.
The existing customer deal would therefore leave us £11,683 worse off over the 27 month period.
The new customer deals are not allowed if you are an existing customer, we've checked.
It's obvious grubby and shabby, but is it against any regulation or rule anyone has heard of?
The current payment is £1,186.22 a month (the interest part).
When we came to look at new fixes for Lloyds, we saw a 2 year fixed deal (until August 2015) at 1.89%, with a £2k fee, which would mean an interest payment of £709.50 a month, or £21,156 over 27 months including the fee.
However, the best 2 year fix for exisiting customers is 3.24% until August 2015, no fee. That would cost £1,216.28 a month, or £32,839.56 over 24 months.
The existing customer deal would therefore leave us £11,683 worse off over the 27 month period.
The new customer deals are not allowed if you are an existing customer, we've checked.
It's obvious grubby and shabby, but is it against any regulation or rule anyone has heard of?
...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.
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Lenders are free to offer any rates they choose to any type of customer. Makes no sense to risk a new customer over a current well tested and paying one but that's how it is unfortunately.
What LTV are you at? What provision is in place for the repayment of the capital?
Big changes in interest only lending since 2011 so your options for moving will be restricted if you chose to go elsewhere.
What is the follow on rate you have?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Follow on rate is 3.75%. Mortgage approx £450k, value approx £800k...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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Should have options at that LTV for interest only.
Have you considered longer than 2 year fixed rates?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
neverdespairgirl wrote: »It's obvious grubby and shabby, but is it against any regulation or rule anyone has heard of?
Lenders only have limited tranches of funds available at these rates. Has been the case for many years that lenders offer marginally better rates to attract new business.
You have no loyalty to Lloyds. If you obtained a far better rate elsewhere, then you would remortgage.
Finally new business is more profitable than old. The longer the mortgage term the better.0 -
Move to another lender?0
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Thanks. I'd think OH and I had demonstrated that we were worth having as customers - we both bank with Lloyds, and we haven't missed a payment, made one late, or anything on the mortgage.
I suppose I'm still influenced by my grandfather's attitude, as he thought mutual loyalty between bank manager and customer was crucial (he was the former).
Looking elsewhere is obviously on the cards. If it was only a few hundred pounds over 27 months, it might not have been worth the grief (we're both self-employed, so it's more grief than if we were PAYE) but the sums here are huge....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
May be worth speaking to HSBC. They still offer interest only mortgages to high income earners with fluctuating incomes.0
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If you look at remortgage products when you are an existing borrower you can get a nasty shock when you find out the "introductory shagpile" has given way to the "existing customer lino."
Often, lenders only show remortgage products on their websites. These are for new borrowers transferring to the lender and products for existing borrowers are often only available with a phone call.
I would look at other lenders and consider a remortgage yourself. Many cover the cost of transferring and have fee-free products, which may be more advantageous to the smaller mortgage.
One of the reasons I like Nationwide is that existing borrowers get access to the same products as new ones. A bit of equality from a mutual!I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »
I would look at other lenders and consider a remortgage yourself. Many cover the cost of transferring and have fee-free products, which may be more advantageous to the smaller mortgage.
Thanks. It just seems unnecessarily grubby, the whole screw-the-customer-once-you-have-him lark!...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
It would cost you about another £1000 a month over 25 years at 3.24% to change over to repayment !
Good Luck on finding another lender.
Check out First Direct as they do offset mortgages for high earners OVER £50K and IO0
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