Banks push to become one-stop shops
Banks are increasingly focussing their sales efforts on their existing customers as they seek to cater for all their customers' financial needs.
Halifax is the latest to join the trend of the larger banks and building societies which are targeting their current account customers with special deals on other products.
David Black, Banking Specialist at Defaqto said: "We've already seen banks focussing their unsecured lending on their existing customers but now there is the beginning of a trend to target mortgage lending in the same way with a series of special mortgage offers available exclusively to current account customers.
"Banks see the current account as the main relationship builder with the customer and it also enables them to have a much better understanding of the financial capabilities of each customer. The cross-selling of other products on to the existing customer base is destined to become the key battleground as each bank strives to become the one-stop shop for all the personal finance needs of their customers.
"Many of the smaller providers, particularly in the Building Society sector, do not offer current accounts and will be unable to compete in this way.
"We're in an age where it is very easy to quickly compare the majority of financial products thanks to the proliferation of price comparison sites and newspaper best buy tables. While it is easy enough to switch an individual account - such as a credit card or current account - the prospect of changing your whole range of accounts at the same time would be something at which most consumers would baulk.
"Just because the rate offered by the special deal is slightly below the standard rate available to non- current account customers, it does not necessarily mean that you cannot get a better deal elsewhere. People should shop around for the best deals as loyalty does not necessarily pay."
Mortgages
Abbey offer free valuations and a cash back on certain mortgages to their Abbey or Alliance & Leicester current account customers.
Halifax offer between 0.2% and 0.4% off certain mortgages to their current account customers. For example its 2 year fixed rate mortgage with a £995 fee (60% Loan-to-Value) is reduced from 3.99% to 3.69% for their current account customers.
HSBC offer their HSBC Plus & HSBC Premier current account customers a 0.15% discount off the standard rate of selected mortgages.
For example their 2 year fixed rate mortgage with a £599 booking fee (maximum 75% Loan-to-Value) is reduced from 3.99% to 3.84%.
Nationwide Building Society is offering 90% mortgages to their FlexAccount (current account) customers.
NatWest offer some preferential mortgage rates to their Advantage Private, Advantage Business and Advantage Gold current account customers.
For example discounts of 0.05% or 0.10% (depending on the current account held) are available off their standard 3.99% 2 year fixed rate mortgage which has a £999 product fee and is available up to 75% Loan-to-Value.
Royal Bank of Scotland offer similar discounts to NatWest for their Royalties Private, Royalties Business and Royalties Gold current account customers.
Current account
Abbey will be offering their Zero Current account exclusively to their mortgage customers.
Credit cards and unsecured loans
Halifax offer an additional 3 months at 0% on purchases (for 12 months, instead of 9 months) to their current account customers.
HSBC's credit cards and unsecured loans are only available to HSBC current account customers.
NatWest's credit cards and unsecured loans are only available to NatWest current account customers.
Nationwide Building Society are offering a market leading unsecured loan at 7.6% APR for loans from £7,500 to £14,000 for up to 5 years to its current account customers.
Royal Bank of Scotland's credit cards and unsecured loans are only available to Royal Bank of Scotland current account customers.
Savings accounts
Halifax offer an extra 0.20% on a range of variable rate savings products to their current account customers.
First Direct, HSBC, Lloyds TSB and Norwich and Peterborough Building Society all offer regular monthly savings accounts that are only available to their current account holders.