Quarter of available mortgages restricted to existing customers

While the number of mortgage products available has increased to 2,948 from only 1,686 in July 2009, over a quarter of the mortgages available today are restricted to the lender's existing customers, according to research from Defaqto.

Kevin Bray, Insight Analyst for Banking at Defaqto said: "While it is no surprise to see that almost 10% of mortgages are restricted to lenders' existing mortgage borrowers, there has been a noticeable move by the major lenders to launch mortgage deals that are only available to their current account holders."

He added: "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. The typical deal available has a rate that is between 0.05% and 0.20% cheaper than the lender's standard mortgage range. In some cases there are reduced fees and others permit higher loan-to-value borrowing than their standard range."

Lenders offering special mortgage deals to their current account customers include Alliance & Leicester Direct, Halifax, HSBC, Lloyds TSB, Lloyds TSB Scotland, Nationwide Building Society, NatWest, Norwich and Peterborough Building Society, Royal Bank of Scotland, Santander, The Co-operative Bank, Ulster Bank.