Mortgage holders rarely receive better rates for their loyalty, according to new research from Which?. Out of 15 lenders that responded to the consumer group's inquiry, only West Brom Building Society explicitly stated it offers cheaper rates to existing borrowers.
HSBC and First Direct were found to offer better deals to existing customers through their separate product ranges. Nationwide and TSB also stated that existing customers seeking a new deal would be offered rates matching or beating those available to new customers, with TSB adding that existing mortgage customers avoid legal and valuation costs.
Eight lenders, including Barclays, Lloyds, and NatWest, confirmed they do not offer discounts to existing customers. An analysis of Moneyfacts data from 16 October showed that only 150 out of 5,921 remortgage products were exclusively for existing borrowers, representing about 3% of the market.
While a cheaper rate is uncommon, some lenders offer other loyalty perks. Nationwide Building Society provided qualifying members with a £100 Fairer Share reward earlier this year. Yorkshire Building Society offers £250 cashback to savers taking out a qualifying mortgage, and Skipton Building Society provides £250 cashback to Lifetime ISA customers buying their first home with a Skipton mortgage.
Which? research also found that 21% of mortgage holders chose their lender because they already had another financial product with them. However, only three providers indicated that existing customers with another financial product, such as a bank account, are offered preferential rates, typically requiring premier banking status.