Mortgage lenders 'charging existing customers to renew deals'
Published On 31 March 2008
Some mortgage lenders are alienating their existing customers by charging them fees to renew their deals, a new report has suggested.Research by moneysupermarket.com found that people coming to the end of a two-year fixed-rate mortgage deal could be charged between £500 and £2,900 by their existing lender to renew the loan.
On average, it costs £1,350 for consumers to renew their mortgage deal with their lender.
Louise Cuming, head of mortgages at the site, said: "With mortgage applications on the decrease, lenders should be concentrating on retaining existing customers now more than ever.
"It's disappointing seeing lenders treating their existing customers this way. Loyalty should be rewarded, not punished. Instead these costs reflect pretty poor business practice.
"These charges come with many different names, but ultimately they all mean the same thing: a cost for remaining loyal."
Figures from the British Bankers' Association showed that mortgage lending increased by £5.6 billion in February.
