Banks to become one-stop shops

Nia Williams

January 5, 2010

Halifax is the latest to join the trend of larger banks and building societies which are targeting their current account customers with special deals on their other products.

David Black, banking specialist at Defaqto said: “We’ve already seen banks focusing 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.”

As far as mortgages are concerned, Abbey offers free valuations and a cashback on certain mortgages to their Abbey or Alliance & Leicester current account customers.

Halifax offers 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 offers its HSBC Plus & HSBC Premier current account customers a 0.15% discount off the standard rate of selected mortgages. For example its 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 offers some preferential mortgage rates to its 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 its 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 offers similar discounts to NatWest for its Royalties Private, Royalties Business and Royalties Gold 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,” said Black. “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.”

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