Cheap mortgage rates for loyal customers

One in four mortgages were restricted to lenders' existing customers who already held a current account or home loan with the lender, according to recent research by Defaqto.

The research backs up the recent trend that has seen the best mortgage rates being made available to customers who remain loyal to one particular lender.

David Black, banking consultant at Defaqto, told the BBC: "If I am a bank and had your current account, I would know much more about you and target you with what you might need. Banks are trying to be one-stop shops for the entire financial needs of their customers."

Mortgage lending reached a plateau in the middle of 2010, according to the latest figures from the Bank of England, only rising by £86 million in July, one of the lowest monthly increases on record.

Defaqto also found that some of the highest savings interest rates were only available to people who had other accounts with the providers.

Barclays, Santander and Nationwide all recently offered new incentives on mortgages, saving and loans to current customers only.

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2010-09-13 12:22:58 © Moneyextra.com