About a quarter of the mortgage market is off limits to new customers, reserved for existing customers only, according to Defaqto.

The financial research company has found that there are now 2,948 mortgage deals on offer, compared to 1,686 in July 2009, but that more than 25 per cent of these are not available to borrowers who are not already customers of the mortgage provider.

Some of the deals are restricted to existing mortgage customers, but a growing number of mortgages have been restricted to a provider’s current account customers, offering them a better rate on their mortgage than new customers.

Kevin Bray, insight analyst for banking at Defaqto, said that it comes as “no surprise” that 10 per cent of mortgages are restricted to lenders’ existing mortgage customers, but that the “noticeable move” towards offering exclusive deals to current account customers was less expected.

“The banks are clearly keen to further their ambitions of becoming one-stop shops for all their customers’ personal financial product needs and offering special mortgage deals to their current account customers is a definite part of this strategy,” Mr Bray explained.

He added that the typical rate available to an existing customer is between 0.05 and 0.20 per cent cheaper than the lender’s standard variable rate which it offers to other customers.

And, there are sometimes other benefits for existing customers in addition to lower rates, he said, such as reduced fees and higher loan to value mortgages than those available in their standard range.

© Fair Investment Company Ltd

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