Banks offering existing customers cheaper mortgages

Mortgage brokers have reported banks and building societies passing on higher interest rates to new borrowers, while keeping remortgage rates for existing customers the same. Loyal borrowers can currently benefit from interest rates up to 1.2 percentage points lower than those offered to new customers by the same lender. Lenders have been flooded with borrowers desperate to lock in new deals before further rate rises in the coming weeks. However, existing customers are being prioritised as banks already know their financial information and track record of paying back their loan, making applications easier to accept. Chris Sykes, of broker Private Finance, said: “There are longer wait times for mortgage applications and higher ‘fall-through' rates amongst borrowers as many rush to lock in a new rate. This has made it more expensive for lenders to bring in new business and makes it even more beneficial to retain existing clients." 

The Daily Telegraph (17/09/2022)   The Sunday Telegraph (18/09/2022)   The Sunday Times (18/09/2022)