Defaqto: New mortgages often favour existing customers

Date:Tuesday 11th May 2010
Author: Max Freedman

There are many mortgages being offered by financial institutions that are solely available to existing customers, according to Defaqto, but this is not a surprise.

Insight analyst for banking at the research firm Kevin Bray pointed out that there has been a noticeable surge in the number of mortgages are restricted to borrowers who already deal with that company.

Research by Defaqto indicated that over one-quarter of the 2,948 products available fit in to this category.

Mr Bray remarked: "In some cases there are reduced fees and others permit higher loan-to-value borrowing than their standard range."

He noted that typically a deal for an existing customer will be between 0.05 and 0.2 per cent cheaper than the interest rate offered to a new borrower.

The firm recently announced that direct-only mortgages are also accounting for an increasing proportion of products on the market, with 12 of the top 20 best buy deals at the time only available by contacting the provider directly.