First-time Buyers
Special deals for current account customers
More and more banks are offering enhanced mortgage deals to current account holders in an attempt to become ‘one-stop shops’, providing as many financial services and products as possible to customers.
According to research from financial products analyst, Defaqto, the number of homeloans on offer solely to current account holders is increasing.
Defaqto points out that that Abbey provides free valuations and cash back on a range of mortgage deals available to its Abbey or Alliance & Leicester current account customers. From January 11, Abbey will also offer its new Zero Current account (with no fees for overdrafts, whether authorised or unauthorised) exclusively to its mortgage customers.
Meanwhile, Halifax announced yesterday that it is offering between 0.2% and 0.4% off some of its mortgages for customers paying at least £1,000 a month into its current account. For instance, customers on a Halifax two-year fixed-rate deal with a £995 fee (available up to 60% loan to value) will pay 3.69% rather than 3.99% if they have or open a current account and pay in the required minimum.
HSBC offers its HSBC Plus & HSBC Premier current account customers a 0.15% discount off the standard rate of certain mortgage deals. For example its two-year fixed-rate mortgage with a £599 booking fee (available up to a maximum 75% loan to value) falls from 3.99% to 3.84%.
Nationwide Building Society is offering 90% mortgages to its FlexAccount customers. NatWest and Royal Bank of Scotland also offer lower rates to current account customers.
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Defaqto’s banking specialist David Black said: “We’ve already seen banks focusing their unsecured lending on existing customers but now there is the beginning of a trend to target mortgage lending in the same way with a series of special mortgage offers available exclusively to current account customers.
“The cross-selling of other products onto the existing customer base is destined to become the key battleground as each bank strives to become the one-stop shop for all the personal finance needs of their customers.”
Black went on to warn 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.