Any Mortgage Advice...existing Lender Vs Moving

[funkylad20]

Hi, just wondering anyone can answer a question we have. We have a mortgage and need to renew it when it comes out of the fixed rate period in three months time. Now, if we stay with our existing lender, we note that their rates are not anywhere near as good as if we were a new customer. Why would a lender not want to retain existing customers by offering them better rates? It seems quite nonsensical?

[bednobs]

because they make up the difference by charging new customers extra set up fees

[funkylad20]

It just doesn't encourage existing customers not to move though, or am I misunderstanding them? I have no inclination to stay with them if I can go elsewhere any pay less (as many other providers do not actually charge any fees).

[bednobs]

don't they? There is usually an arrangement fee, plus a survey fee

[bednobs]

also, changing mortgage providers is a MAJOR hassle. Whe did you last get a mortgage?

[funkylad20]

No, they don't. We last changed two years ago (minus three months!), before that two years prior and before that two years prior to that. A lot don't charge fees now (we have a favourable over 65% LTV I guess which is a big factor), either arrangement fees, valuation fees or legal fees.

[Hymie]

To change mortgage providers is likely to cost the order of £1,500 (all in) – you need to calculate that you will gain more than this amount over the life of the fixed rate deal you can get.

Often your current provider will offer an enhanced deal if you threaten to move the mortgage.

[granny grump]

If you look at the APR of products with new and existing lender that will give you a good idea of which is the best deal The APR takes all the costs; rates etc into account.

[SirOracle]

Don't think APR takes these things into account Granny Grump.

[ukbod2015]

they just think you will stay and avoid the hassle of changing like many people do with car insurance.

[granny grump]

OOOPs not APR but AER sorry for that