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ISCOVER
Staff Reporter
The number of lenders offering loyalty discount mortgages has almost doubled since December 2010, new research has found.
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According to RateCity, last year there were five of these loans available on the market and now there are nine.
RateCity chief executive Damian Smith said more lenders are rewarding their home loan customers for not switching to another lender, as opposed to penalising them with excessive fees.
“Since the announcement of the abolishment of excessive early exit fees on variable rate mortgages, we’ve noticed more lenders offering incentives to keep their mortgage customers with loyalty discounts,” he said.
“Loyalty discounts are an easy solution for lenders to help them retain their customers and we’re expecting more incentives like these to enter the market in the coming months.”
Out of the nine lenders that offer loyalty discounts, Bankwest offers the largest reduction. It’s Rate Cutter Home Loan, with an advertised standard variable interest rate of 7.3 percent, offers 80 basis points off the rate after five years and for the remainder of the loan term, according to RateCity data.
