No More Mortgage Lender Loyalty

There once was a time when loyalty was rewarded. However times have changed and loyalty to your mortgage lender no longer seems important.

These days the average mortgage lender seems obsessed with attracting new business while few seem interested in providing their existing customers with incentives to remain with them.

New customers are often drawn into taking out financial products from their mortgage lender because of various incentives that are offered to attract new business.

The incentives on offer can include discounts on application fees, discounted interest rates, free valuations, cash backs, and even free gifts.

However, it seems that once the relationship between the mortgage lender and the customers moves beyond the honeymoon stage there is little incentive for the borrower to remain loyal.

Discounts on interest rates generally expire after several years, after which the borrower will be forced to pay the mortgage lender's Standard Variable Rate unless they switch to a new mortgage lender.

Some mortgage lenders will allow for a renegotiation of the interest rate once the discount period expires, but many will not and will instead focus their efforts on attracting new customers rather than keeping their existing ones.

Often this results in the borrower switching to a new mortgage lender to secure a new mortgage product with a discounted interest rate. Although this can attract application fees, the savings in interest payments will usually more than make up for this one-off expense.

If your mortgage is no longer offering you any incentives to remain with your current mortgage lender, try to negotiate a discount instead of paying the lender's Standard Variable Rate.

If that doesn't work, contact an independent mortgage broker to find out what mortgage products are currently available on the market that could save you money.

Remember, if you decide to switch to a new mortgage lender you may be eligible for any number of incentives that they offer to attract new customers. Considering the offer is available, the best course of action for you to take may be to switch your mortgage lender and therefore take advantage of the offer.

If in doubt, speak to an independent mortgage adviser for some impartial advice. A fully independent mortgage broker will help select the right mortgage lender for you based on your individual circumstances.

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