Lenders accused of using gimmicks to entice borrowers

How’d you like a free iPad mini? Take out a mortgage with Lloyds Bank in the next few weeks and you could get one.

The move is the latest attempt to entice borrowers but has led to accusations that lenders are focusing on gimmicks rather than decent deals.

Lloyds says the iPad offer - which is worth an estimated £500 - is actually useful to homemovers or buyers. “Our customers have told us about the inconvenience of being unconnected when moving into a new house,” said Marc Page, mortgages director at Lloyds Bank.

“By providing them with a connected iPad, we’re enabling them to complete domestic necessities very quickly, such as setting up bills, transferring money or simply surfing the internet.”

Other lenders are currently offering £1,000 cashback to new borrowers or money towards their Council Tax bill.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With lenders behind on their targets for the year, expect others to follow suit with their own gimmicks to entice customers through the door. It seems as though rock-bottom rates are no longer enough; lenders need another incentive on top such as a free iPad.”

But borrowers should ignore the extras and concentrate on the small print in the mortgage deals, looking closely at the interest rate charged and any fees or restrictions. “While these offers are eye-catching, try and look beyond them to the mortgage itself,” Mr Harris advised.

“Strip out the equivalent cost of the freebie to see whether you are getting a good deal or whether you could get a better one elsewhere. You might be saving yourself a few hundred pounds on an iPad but if you end up paying more interest on your mortgage then it won’t be a good deal in the long run.”

To get a 16GB iPad mini 4G, a 6GB data card and six months’ 24/7 technical support from the Geek Squad, you’ll need to successfully apply for a Lloyds Bank mortgage between 7 October and 27 November.