Banks extend mortgage offers in desperate bid to retain customers
Homeowners can now enjoy much greater flexibility in the mortgage market after a string of lenders extended their offer periods.
With a slump in activity in the housing market, high street banks have been keen to keep hold of existing customers whose current deals are coming to an end.
Aaron Strutt of Trinity Financial, a mortgage broker, said several lenders had increased their "offer validity" periods, with those from Nationwide, NatWest, Santander and Virgin Money all now lasting six months.
Barclays has also extended its offer period from 90 to 150 days for some existing customers.
Longer mortgage offer periods are extremely useful for borrowers as it allows them to lock in a rate today but retain the option of taking out a mortgage elsewhere, should rates elsewhere fall between now and the expiry of the loan.
Mark Harris of SPF Private Clients, another mortgage broker, said he had seen examples of lenders allowing existing customers to move to a cheaper deal straight away, as they try to retain as many customers as possible.
In one case a Santander customer was able to switch to a mortgage with a lower rate of 3.39pc immediately, even though their existing deal was due to run until August.
“With transaction levels muted for new property purchases, lenders are keen to secure remortgage business,” said Mr Harris.
“By offering extended remortgage offer periods, they ensure they lock in their customers before they’ve even had a chance to look elsewhere for a new mortgage.
“This is great news for borrowers who are worried about interest rates rising. They can book a fixed rate now, prior to their existing rate coming to an end, which buys them peace of mind.”
For the week's most important personal finance news, analysis and expert advice, from pensions and property to investment ideas and savings tips, sign up to our weekly newsletter.
