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Should mortgage lenders focus more on client retention?

Journalist: Carmen Reichman, FTAdviser

ended 10. September 2025

Dear mortgage advisers

Target group is urging lenders to focus not just on origination but also on client retention. It's cheaper than origination and thus could bring in more money.

Would you like to see lenders focus more on client servicing? What would that mean for mortgage renewals and trying to get the best deal?

What would it mean in light of the mortgage advice reforms?

Please let me know!

For context, here is their quote: 

Melanie Spencer, growth director at Target Group, said: “With lending targets to hit and tough competition, there’s no question that customer acquisition remains absolutely critical. But lenders must also consider what happens when the ink is dry and the keys are handed over. We have to challenge the mindset that the mortgage journey ends at origination. There is massive untapped potential in mortgage servicing to drive customer retention and profitable growth. 

“With high mortgage maturity and high churn, it’s a clear wake-up call for the mortgage market. It requires lenders to re-think their post-origination strategies – moving away from just statements and arrears and focusing on building relationships, earning trust and delivering long-term value. Today, smart servicing leverages emerging technologies to transform the experience into something that is proactive, personal and ultimately profitable. 

“To keep seeing servicing as a cost centre is a huge mistake and one that if not corrected will leave lenders lagging behind the competition.” 

3 responses from the Newspage community

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Editor
David Stirling
Independent Financial Adviser at Mint Wealth
In today’s market, lenders and brokers are often at loggerheads. The banks are working harder than ever to cut out the very intermediaries who introduced the clients in the first place. This creates a tug-of-war and lenders are making it easier for customers to switch products at the touch of a button, while brokers are focused on either arranging a product transfer with the existing lender or finding a more competitive deal elsewhere. Ultimately, the choice lies with the client but working with a broker can open the door to a wider range of lenders and potentially more attractive offers than those available from a single bank.
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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Lenders desperately need to shift from treating mortgages like one-night stands to building proper long-term relationships. The current system is frankly broken – clients routinely stay put with suboptimal deals whilst better rates sit tantalizingly out of reach, largely because lenders prioritise easy retention over genuine customer welfare.
The real scandal isn't just poor servicing; it's how specialist lenders deliberately obstruct product transfers for brokers, making the process so tortuous that brokers and clients simply give up. True retention should mean earning loyalty through transparency and competitive offerings, not through friction and inertia that keeps customers trapped in inferior deals.
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Omer Mehmet
Managing Director at Trinity Finance
Too many lenders still treat a mortgage as a one-off transaction. In reality, the average borrower will refinance multiple times over their lifetime — and how they are looked after post-completion makes or breaks trust.

Retention shouldn’t just mean sending out a letter three months before maturity. Borrowers want proactive engagement, personalised servicing and reassurance that they’re always on the best deal for their circumstances.

Lenders investing in smart servicing technology is welcome, but it must go hand-in-hand with transparency. The new mortgage advice reforms mean it’s vital that retention activity doesn’t erode consumer choice. Clients need impartial advice at renewal, not to be nudged into the easiest or most profitable product for the lender.