Buying home - mortgage provider account relationship?

moneysaver1978

Sick of paying inflated rent in London, as a couple we are looking to buy our first home together (although not first-time home buyers) within the next 2-3 years.

I have several savings, ISAs, accounts, etc with different providers however, some of the rates are really poor, I was going to move and close them but was advised that it was important to have an account with potential mortgage providers to get best rates possible as an existing customer, even if the account is no longer active or subscribed.

Is this true?

user1977

moneysaver1978 said:

I was advised that it was important to have an account with potential mortgage providers to get best rates possible as an existing customer, even if the account is no longer active or subscribed.

Is this true?

Who advised you? I think it's been decades since lenders cared much about whether you're an existing customer.

K_S

@moneysaver1978 I get this question a lot! Generally speaking, for mainstream mortgage lending, this is not true.

When looking to get a mortgage to purchase a property, having an account with lender X does not get you a better rate with them compared to someone else who has never used the bank.

There are a few exceptions such as Barclays Premier account holders (usually HNIs) which gives you a slight discount for some Barclays products, Nationwide at some point in the past used to offer a small discount for members, etc.

Snookie12cat

moneysaver1978 said:

Sick of paying inflated rent in London, as a couple we are looking to buy our first home together (although not first-time home buyers) within the next 2-3 years.

I have several savings, ISAs, accounts, etc with different providers however, some of the rates are really poor, I was going to move and close them but was advised that it was important to have an account with potential mortgage providers to get best rates possible as an existing customer, even if the account is no longer active or subscribed.

Is this true?

This is completely false. There are no customer rates. The rates advertised are the same for all, new and old customers. Your best deals might not even be a high street lender.

moneysaver1978

Thanks all for your responses! So having a Barclaycard credit card, or an ISA with Nationwide doesn't mean that I would get a mortgage offer or a better rate.

Just wanted to cover all bases and tick as many positive boxes as possible because I was discharged from bankrupt in 2008.

Edi81

moneysaver1978 said:

Thanks all for your responses! So having a Barclaycard credit card, or an ISA with Nationwide doesn't mean that I would get a mortgage offer or a better rate.

Just wanted to cover all bases and tick as many positive boxes as possible because I was discharged from bankrupt in 2008.

Now that is a really key piece of info. 

Some lenders have very long memories so you are best to tell your broker which lenders were included in the bankruptcy. 

K_S

moneysaver1978 said:

Thanks all for your responses! So having a Barclaycard credit card, or an ISA with Nationwide doesn't mean that I would get a mortgage offer or a better rate.

Just wanted to cover all bases and tick as many positive boxes as possible because I was discharged from bankrupt in 2008.

@moneysaver1978 That's correct.

Don't stress about the historic BR too much. While a small number of lenders will not lend to ex-BRs no matter how long it's been, most lenders will not care about one that was discharged that long ago. If the BR involved a repo then a few more lenders will not consider.

In any case, on its own it shouldn't make a huge difference to your chances of a mortgage or the rates that you will be eligible for.

SavingPennies_2

I got a slightly better mortgage rate (2 years ago) with Nationwide for having a current account with them. However! I didn't previously have an account, I just opened it there and then to get the better rate, I don't use the account, it's just exists with a few £ in it.