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Remortage - Different Rates for Existing Customer Vs New Customer
Akta86
Posts: 2 Newbie
Hi all
I have an existing fix rate mortgage ending soon and had noticed my existing lender has now dropped their rates considerably for a 5 year fix, making it cheaper to stick with them instead of switching lender.
However, it appears the dropped rate is only for new customers and as an existing customer with over 50% LTV. If I stick with them, I get a nearly 1% dearer rate for the same product!
In my years of mortgaging/remortgaging, this is the first time I have come across this. Is it normal? I know the "loyalty" penalty is widespread in other markets but this is the first time I have seen this with a mortgage lender/bank and just feels really unfair.
Many thanks
I have an existing fix rate mortgage ending soon and had noticed my existing lender has now dropped their rates considerably for a 5 year fix, making it cheaper to stick with them instead of switching lender.
However, it appears the dropped rate is only for new customers and as an existing customer with over 50% LTV. If I stick with them, I get a nearly 1% dearer rate for the same product!
In my years of mortgaging/remortgaging, this is the first time I have come across this. Is it normal? I know the "loyalty" penalty is widespread in other markets but this is the first time I have seen this with a mortgage lender/bank and just feels really unfair.
Many thanks
0
Comments
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Some lenders do it, some do not. I would not say its normal but it is also not uncommon.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.1
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In my years of mortgaging/remortgaging, this is the first time I have come across this. Is it normal?It happens sometimes. Mainly if the lender is looking to increase their lending book by buying market share or has changed their underwriting and has more confidence in future applications than they do with historic. i.e. if the lender has decided to cherry pick higher quality lending, then they will give it a better rate than lending that was set to a lower lending criteria.I know the "loyalty" penalty is widespread in other markets but this is the first time I have seen this with a mortgage lender/bank and just feels really unfair.Nothing to do with fairness or loyalty.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
Fair enough. Appreciate the responses. thank you0
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