Mortgage lenders offer £25k to switch to rivals

Lenders are pioneering a scheme that has seen some mortgage holders being offered as much as £25,000 to switch to another provider.

Advantage, which is part of the Morgan Stanley group, Edeus and GMAC have all trialled the scheme, which has been praised by one financial expert.

Jeff Knight, marketing director at GMAC, told Money Wise: "This is currently just a pilot but we are contacting borrowers who have a good credit history and could remortgage away if their equity stakes were larger."

Mortgage Express, an arm of the old Bradford & Bingley group, is waiving any fees that might be incurred to encourage mortgage holders to take part in the scheme, which is targeting those whose equity has plunged over the last 12 months.

Richard Morea, from mortgage brokers London & Country, called the scheme an "extremely innovative approach" to banking, in an interview with the Daily Mail.

The offers were a "lifeline" to many borrowers enabling them to move or remortgage at a time when it would have been otherwise impossible, he said.

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2009-06-26 15:49:05 © Moneyextra.com