Am I missing something here?

m0rgana

So...we're just out of our 2 year introductory rate with a mortgage lender (post office) and are shopping around for a better deal. I'd heard that it was usually far less hassle to go through your current lender, so called them to find out what they could offer me.

As an existing customer, it turns out, the best rate on 70% LTV they could offer me was well over 4%! So I'm obviously going to have to start looking elsewhere

is this usually how it works? If so, why do so many people fix new deals with their current lender? Even factoring in fees and valuation would make that not worth doing when we could move. So I wonder if something here is wrong?

kingstreet

Some lenders don't offer particularly good customer retention rates as you are finding with Bank of Ireland.

Others are happy to offer their better rates to their existing customers.

You now need to look at remortgage options to see what's available. Check the costs involved to ensure you compare like with like. Some lenders offer a free valuation and free legal work, while others may offer a much better rate, but you pay for those items.

m0rgana

Thanks Kingstreet. Yes, I suppose I didn't realise how much it varies from one lender to another, though I have to say I'm massively disappointed. It possibly makes sense that their strategy is more geared towards getting news business, as their rates are really good at the moment (for new customers at least) - and they seem to make it really hard to get a slot to speak to an advisor if you're an existing customer, too.

At least we know this now I suppose! And getting a valuation done may be no bad thing - there seems to be a small property boom going on in my street and we have been curious about whether our property will also have risen as much since we moved in. Ho hum!

ACG

Some lenders do offer good rates for new and existing customers - but what a lender does isnt a sign of what they will be doing in the future.

It is usually less hassle sticking with the same lender but not always financially speaking the right thing to do.

Its not a weekly shop your doing, its probably the biggest commitment of your life so its worth doing properly when the time comes - that might be doing what is easiest, it might be doing what is cheapest or it may be something different.

kingstreet

Things are odd with BoI.

I'm not sure how much they want to be in that marketing agreement with Post Office. It may well be they are honouring it to the letter but are happy to see borrowers go when their product ends, as having the mortgage on the books means a sliding scale of capital required to back it, based on the loan to value.

They are having capital issues due to problems with the Irish holding company.

Saying which, you'd think that at 70% you'd be one of the borrowers they'd like to keep.

I think borrowers should be more wary of entering into an agreement with "Post Office" because of the BoI situation and ask themselves what happens if they are unable to remortgage elsewhere?

I can think of a good few lenders I'd rather be with if I found myself stuck, due to a change of circumstances, between purchase and the end of a fix.

m0rgana

That's really interesting background info, thanks. Yes I have heard a few things about BoI that are not great, and was wondering if moving might be a good idea in any case - aren't they hiking up rates for their (non post office) customers as well, even at a time when that seems to be an invitation for customers to switch? At the time I remember thinking it was like they wanted rid of customers and now I'm possibly getting an idea of why...

Best alternatives for us seem to be Nationwide or Santander FWIW.

FWIW we were well aware that it was BoI behind Post Office when we signed up.

kingstreet

I must say I do like Nationwide's attitude towards its existing borrowers, giving them the same deal as they would to a new borrower.

Santander is in the same boat as BoI and I would avoid, personally. Plenty of threads on here about the same treatment you are getting from BoI.