Money Insider: Banks reward loyalty – but is it enough?

barclays bank has launched a range of discounted loyalty mortgage deals following similar moves by HSBC, the Halifax, Nationwide and Santander, which also offer preferential rates to existing current account customers.

Barclays cut its fixed-rate, tracker and offset mortgage rates by up to 0.54 percentage points for customers who have a current account and have paid in at least £800 in each of the three months before submitting their mortgage application.

There is no question that it is a generous discount, resulting in some of the re-priced deals featuring at the top end of best-buy tables. The discount on Barclays two-year fix is the best of the bunch and cuts the rate to a very competitive 2.95 per cent with a £999 fee, up to 70 per cent loan-to-value (LTV). This gives the equivalent HSBC two-year deal – at 2.99 per cent with a lower fee of £399 – a close run for its money.

However, there is also a third option to consider from the Yorkshire Building Society – a rate of 2.89 per cent with £995 fee available to a more generous 75 per cent LTV.

Other examples include the Barclays two-year fix for customers needing to borrow to 80 per cent LTV, at 4.19 per cent with a £999 fee, although the Post Office is offering 3.94 per cent at £995 and up to a higher LTV of 85 per cent.

Similarly, if you are looking at a five-year fix, the Barclays rate of 4.44 per cent and £999 fee (up to 70 per cent LTV) is beaten by the Yorkshire BS at 4.19 per cent with a fee of £495, to a slightly higher LTV of 75 per cent.

There is a growing trend among banks to reward existing customers and cross-sell products with reduced rates or fees as a loyalty incentive. It is good to see mortgage providers tending to the needs of existing customers rather than concentrating their efforts on trying to attract new business.

But while this move by Barclays is to be welcomed, the competitiveness of products on offer from any of Britain's high-street banks is not the be-all and end-all – it is very much about service too.

I wish Britain's lenders could just sort it out

I don't expect my bank to make errors with my account but, if it does, all I ask is that the matter is dealt with promptly, efficiently and for me to be confident that the situation has been taken seriously and won’t happen again.

There are times where things go wrong but if banks focus too much on selling new products rather than providing consistently excellent customer service, all the good work on lower pricing will come undone.

I don’t want to hear automated important, then ave to wait five minutes to speak to someone who doesn’t have the authority to rectify my issue there and then. I don’t want to hear promises that someone will get back to me but then no one does, forcing me to call again.

I don’t want someone to tell me they’ve sorted the issue, only for my ATM card to be swallowed later that day, or for my statement to show a bank error has been rectified and I have been charged for the privilege.

The biggest irritation for many is that if your bank wants to sell you a product, it seems the systems are all joined up and it’s very simple. But go into your branch and ask for a problem to be put right and suddenly you find none of the centralised offices, UK-based or overseas, seem capable of sorting it out.

Having the most branches, the longest opening hours or best rates on the market is meaningless if they are not backed up by first-class communication and customer care.

Headline rates may look impressive at the top of a best-buy table but, if you find yourself with a reputation for shoddy customer service, they will win you very little in the way of new custom.

Andrew Hagger is a money analyst at Moneynet.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
'Irritatingly Disneyfied': fashion vlogger Zoella
voices

News
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
The last great picture - Winner 'Black and White' and overall 'Wildlife Photographer of the Year'
art
News
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee
people

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon

PROMOTED VIDEO
Life and Style
tech

Board creates magnetic field to achieve lift

News
There have been various incidents of social media users inadvertently flouting the law
news

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

    Trainee Recruitment Consultant Birmingham

    £18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

    Trainee Recruitment Consultants

    £20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

    Helpdesk Analyst

    £23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

    Day In a Page

    Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

    A new American serial killer?

    Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
    Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

    Sting to trap paedophiles may not carry weight in UK courts

    Computer image of ‘Sweetie’ represented entrapment, experts say
    Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

    Return to Fukushima – a land they will never call home again

    Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
    Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

    Wildlife Photographer of the Year

    Intimate image of resting lions claims top prize
    Online petitions: Sign here to change the world

    Want to change the world? Just sign here

    The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
    Ed Sheeran hits back after being labelled too boring to headline festivals

    'You need me, I don’t need you'

    Ed Sheeran hits back after being labelled too boring to headline festivals
    How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

    How to Get Away with Murder

    Shonda Rhimes reinvents the legal drama
    A cup of tea is every worker's right

    Hard to swallow

    Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
    Which animals are nearly extinct?

    Which animals are nearly extinct?

    Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
    12 best children's shoes

    Perfect for leaf-kicking: 12 best children's shoes

    Find footwear perfect to keep kids' feet protected this autumn
    Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

    Arsenal’s ray of light ready to shine again

    Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
    Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

    Moyes’ show of sensitivity thrown back in his face... by Ferguson

    Manchester United legend tramples on successor who resisted criticising his inheritance
    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Lonely Planet’s Best in Travel 2015

    UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London