The most exclusive mortgages

Do existing customers get the best deals on the market?

Not all lenders offer different mortgage deals to new and existing customers, or better deals to customers holding other products, such as current accounts. Some even appear to have more expensive prices for loyal customers who remortgage with them again than with new customers applying fresh.

However, there are lenders that try to encourage existing customers to stick with them, through cashback offers or significantly better product terms.Let's take a look at a few lenders to see what their customers can expect. I'll be including both fees and interest rates when comparing deals.

Existing mortgage customers of Yorkshire Building Society

This lender is a hybrid, since some of its products for existing mortgage customers coming to the end of their deals are actually more expensive, while others are cheaper.

Yorkshire Building Society's two-year fixed rate and two-year fixed rate offset deals with 70% or less of their property value outstanding in mortgage (70% “loan to value” or “LTV”) are more expensive for remortgagers, but the five-year fix is a bit cheaper. This is pretty competitive, if no longer the best, at 4.19% APR with no fee.

All or most of the building society's range for new customers is also available to existing customers who are moving home. This gives you access to their excellent ten-year deals. Locking in 4.19% for five years may be pretty competitive, but for ten years such a low guaranteed rate is extraordinary. Don't expect long-term rates around 4% to occur again until the next big financial crisis. This deal comes with a £1,000 fee for the whole decade.

For more on why fixing on a long-term basis may be a good idea, check out A two-year mortgage will break your heart.

Existing current-account customers of Barclays

Barclays and its subsidiary Woolwich offer £500 off fees on many of their mortgages for their current account customers; for example, with a 75% LTV, current-account holders get the same five-year fix as anyone else at 4.28% APR, but with half the £1,000 fee.

Santander's current account and existing mortgage customers

Santander is waiving mortgage transfer fees (on mortgages of £60,000 or more) for existing mortgage customers who are also current account customers, which, it says, might save you up to £200. It currently offers new customers with 70% LTV a five-year fix, for example, at 3.79% for a £1,000 fee.

Its website indicates that if you contact the bank direct you might also be offered a better deal in conversation with its telephone sales team, but you should compare other prices before accepting. You can use our mortgage centre to do this.

What's more interesting for existing Santander mortgage customers is the £200 cashback deal for switching your current account to them, as that's on top of a 5% fixed interest rate on your cash for 12 months. For more, read Make £300 by switching current accounts.

Nationwide's existing mortgage and current account customers

Nationwide will allow existing customers to switch mid-deal from a tracker to a fix, and will waive the early redemption charges.

Its deals for new and existing customers appear the same, except that new customers get free valuation and legal fees, whereas existing customers remortgaging to it will receive cashback of £300 to £400. Its product range includes a five-year fix at 3.79% with no fee.

Current account customers have access to an exclusive five-year tracker mortgage at the base rate plus 2.39%, with a £100 fee, and no early-repayment charges. Existing mortgage customers also get their £300-£400 cashback.

Such trackers might turn into an own goal in the long run if rates do start rising in the next few years, because before you think to switch, the cheapest fixes could be sold out and removed from sale, and replaced with much more expensive fixes.

That's why cheaper variable mortgages are only for people who are willing to save or overpay – but the good news is you can make as many overpayments as you want with this mortgage, and can then make underpayments later, if you need to.

I've focused mostly on longer fixes, but each of these banks has competitive shorter deals at below 3% for two years too, though I don't find those as special as the five- or ten-year fixed deals. That's not to say shorter deals won't work out better in the long run, but the longer ones are simply better deals based on history and the reliable information that we have.

Whether your own lender will offer the best deal to you depends not just on any headline lower rates or cashback it gives existing customers, but on what the competition is offering too. So be sure to do your own research before accepting any tempting deal they dangle before you. You can do that using the lovemoney.com mortgage centre, where you can also pick the brains of our fee-free mortgage team.

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At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call freephone 0800 804 8045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article.

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.