Mortgage lenders charge a 'cost for remaining loyal'

People face a "cost for remaining loyal" to their mortgage providers, it has been claimed.

According to moneysupermarket.com, the online comparison service, when renewing a two-year fixed-rate mortgage with the same lender UK consumers faced a charge of between £500 and £2,900.

Louise Cuming, head of mortgages for the site, said that this reflected "pretty poor business practice" and that consumers were being "punished" for their loyalty.

She commented: "It's disappointing seeing lenders treating their existing customers this way. Loyalty should be rewarded, not punished.

"Even HSBC, which is the only major provider to waive all fees, blots its copybook by not allowing those customers to go on to its best rate - typically costing an extra £500 in interest over two years.

"Providers seem to be taking loyal people for granted and forgetting that existing customers cost so much less to win."

Mortgages News posted on 01/04/2008 11:27:10