Lenders woo current account holders with mortgage offers

| January 6, 2010 | 0 Comments
”Lenders

Banks are increasingly tempting their current account holders with mortgage offers, as they seek to become “one-stop shops” in financial services.

Research from financial products analyst, Defaqto, suggests the number of mortgage offers available exclusively to current account customers is on the rise.

According to the firm, Abbey offers free valuations and cash back on certain mortgages to their Abbey or Alliance & Leicester current account customers.

Halifax offers between 0.2% and 0.4% off certain mortgages: for example its two-year fixed-rate mortgage with a £995 fee (60% loan-to-value) is reduced from 3.99% to 3.69% for current account customers.

HSBC offers its HSBC Plus & HSBC Premier current account customers a 0.15% discount off the standard rate of selected mortgages: for example its two-year fixed-rate mortgage with a £599 booking fee (maximum 75% loan-to-value) is reduced from 3.99% to 3.84%.

In addition, Nationwide Building Society is offering 90% mortgages to its FlexAccount customers.

NatWest and Royal Bank of Scotland offer similar discounts and from 11th January, Abbey will be offering its new Zero Current account (with no fees for overdrafts, whether authorised or unauthorised) exclusively to its mortgage customers.

However, Defaqto warns that linking mortgage offers with current accounts could raise competition issues, as many of the smaller lenders, particularly in the building society sector, do not offer current accounts.

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