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High street lenders offer cheaper deals to FTBs than to remortgage customers

Journalist: Ruby Hinchliffe, The Telegraph

ended 15. January 2024

High street lenders desperate for business seem to be letting current customers pick up the slack for cheaper first-time buyer deals ahead of another tough year for new business.

SPF is in the process of collating data across the Big Six for us, but you can see here that rates for remortgage deals are significantly higher than for FTB with deposits between 10 and 20pc.

Is this making it hard for some of your clients to remortgage?

6 responses from the Newspage community

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Richard Jennings CeMAP
Founder & Managing Director at Richard Jennings Mortgage Services
I believe this is a reflection of two key market influences. The first is that lenders are offering far more competitive deals to their own borrowers to retain their current mortgage book, thus decreasing the competition within the remortgage market. Secondly, as rates continue to edge down and consumer confidence returns, I see more lenders focusing on trying to attract new, more profitable, first-time buyers. They can try to seek longer term relationships with this demographic of borrowers by cross-selling additional products.
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Ben Perks
Managing Director at Orchard Financial Advisers
Enticing new customers is understandable and whilst it is great to see lenders incentivising first-time buyers it would be great to see more lenders rewarding loyalty. Remortgage customers have been hit particularly hard of late and I would love to see a shift in culture that provides better prospects to remortgage clients.
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Darryl Dhoffer
Founder at The Mortgage Geezer
High street lenders, it would seem are drooling over first-time buyers like a stray dog at a pie shop, but for seasoned borrowers, they are not quite getting the 5-star treatment on remortgage deals. With 1.6 million mortgage fixed-rate deals expected to mature this year, a lot of lenders could be missing out on a lot of business. Let us hope they don't overlook these clients.
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Graham Cox
Director at Bridging Hub
Lenders know they need to get first-time buyers on the ladder to oil the mortgage market wheels so are incentivizing accordingly. It makes sense, but doesn't exactly smack of embracing the spirit of consumer duty and treating remortgage customers fairly.
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Gary Bush
Financial Adviser at MortgageShop.com
UK lenders offering special take-up interest rates for First-Time-Buyers is something we have seen for over 3 decades - lenders like to see a good percentage of fresh-faced borrowers to keep their client mix good and hopefully to keep a client for a longer period of years. Of late however we have seen lenders offering rates at lower levels for Remortgages, we think due to the obvious faster completion timescales for these deals - no long legal chains to worry about and bringing much needed returns to lenders for their 2024 borrowing figures.
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Laura Bairstow
Founder at The Mortgage Masters
We are seeing frustrations among existing homeowners who have seen the headline rates of what lenders are offering and then found out they're not eligible for these. This is especially the case where product transfers are concerned and lenders are choosing to offer beneficial rates to new over existing clients.

It's great to see first-time buyers benefit from large rate reductions but clients who have a track record of consistently making their payments should not be left behind. Let's face it, the majority of homeowners coming off a fixed rate are still paying significantly more than they were previously. Many are feeling the pinch and having to consider their options such as extending their loan term to keep monthly repayments affordable.