Home lenders offer secret cut-price deals

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The Independent Online
NEARLY TWO-THIRDS of the UK's mortgage banks are secretly offering cut-price home loans at the last minute to customers who threaten to move to another lender - even when they have already refused them a better deal.

A nationwide survey of mortgage brokers, conducted for The Independent, shows that up to 60 per cent of mortgage lenders are prepared to offer cheap fixed-rate loans to customers threatening to leave.

Of those offered the deals, up to 70 per cent have already asked their lenders for a better rate and been turned down. Typically, the offers are only made after borrowers have applied elsewhere.

The survey, conducted by the Independent Mortgage Collection, a 250- strong network of brokers, is the first clear evidence of the lengths lenders will go to keep customers.

The network said lenders offering the deals - which are not publicised because they could reduce lenders' profits - include Abbey National, NatWest, Halifax, Nationwide and Woolwich. Such offers were rarely made until two years ago.

The survey comes as increasing numbers of borrowers seek to cut payments by switching from high fixed or variable-rate loans to cheaper deals elsewhere, usually low fixed-rate or discount mortgages. However, valuation and legal fees will apply if the switch is to another lender.