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Loyalty programs offer better mortgage rates to their customers

[ Posted June 14th, 2012 ]

Building societies and banks are improving their loyalty programs for customers that have existing accounts with them in an attempt for to keep borrowers who are shopping around for the best mortgage rates that will meet their needs.  Banks are offering the loyalty drugs to all account holders that are part of their ‘loyalty’ mortgage deals.  Over the last few years, many of the high street banks including Santander, Barclays, and Halifax have started to make better and lower priced mortgage deals available to borrowers that have an account with them in an effort to entice them to stick to their banks.

In order to qualify for any of the low mortgage rates banks require that their customers have had an account with them for at least two months if not more and regularly contribute a regular amount of money into that account on a monthly basis.  NatWest just opened a new loyalty deal up to its customers with active accounts that are ten basis points less than the rates that other mortgage customers receive on the standard mortgage range.  The deals are available for a five year fixed mortgage.

The products help NatWest look a lot better to its own existing customers that are looking for fixed mortgages with attached rates as low as 4.19% for their existing customers.  The new deal does have a £999 fee, but it is much better than the standard five year fixed product that comes with an attached standard rate of 4.29%.  Mortgage broker Andrew Montlake from Coreco stated that usually they do not recommend customers go with loyalty mortgage deals, but the deals have improved over the last several months and therefore they are taking another look at them.

Another loyalty deal being offered to current customers that is worth noting comes from the Co-Operative Bank and is a lifetime tracker mortgage that starts at an interest rate of 3.19%.  What is notable about the tracker deal is that it is applicable for LTVs of 75% and under making it a great deal for those who are considering remortgaging their current deal.  In order to be qualified for the deal, customers must also have held a bank account with the Co-Op for the past two months and in addition have their salary deposited into the account every month on a regular basis.

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