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The best rates now reserved
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Halifax forces borrowers to open current accounts
Garnet Roach garnet@consumerchoices.co.uk
From today, the UK’s biggest mortgage lender will force borrowers with small deposits to open a current account before they can get a mortgage (13-05-08).
Borrowers with a deposit of less than 10 per cent looking to get a mortgage from Halifax (www.Halifax.co.uk) without a broker will be told that they must open a High Interest current account - requiring a monthly deposit of at least £1,000 - before they will be approved reported The Times.
The move, which is being seen as a bid to boost cash deposits, will force thousands of borrowers to switch to Halifax in order to get the best rates.
The bank will also follow Alliance & Leicester ((www.Alliance-Leicester.co.uk) and raise rates for direct business, despite the Bank of England’s decision to keep interest rates at five per cent last week.
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"Wholesale money continues to be significantly more expensive than a year ago. Unfortunately, this increased cost needs to be passed on to new customers"
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A spokesman for Halifax told The Times: “Wholesale money continues to be significantly more expensive than a year ago. Unfortunately, this increased cost needs to be passed on to new customers.”
Chris Eagle, Creditchoices.co.uk commercial manager, said: “Halifax has some of the best mortgage deals on the market, but unless you use a lender these will now be offered only to existing customers or those willing to switch their current account.
“Although brokers are popular with borrowers - customers have to pay a higher rate on their mortgage if they use one. One Halifax deal on offer last week stood at 5.74 per cent with a three-year fix, but this went up to 6.49 per cent if a broker was used.
“Times are hard for borrowers at the moment, but that doesn’t mean that good deals aren’t available if you look closely and are willing, for example, to switch your accounts,” he said.
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