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Caution £4k one year home loans fine for being loyate Today, Money Mail calls and humiliates the corporations and financial institutions that meet mortgagors with the highest loyality fines. The Leeds Buildings Society's worst-case scenario is to charge longstanding mortgages clients a hefty £4,020 a year more than new clients signing up for the cheapest two-year solution. In the best example NatWest will charge the customer an additional £1,788 per year.

Money Mail last months unveiled that the gap between banks' best futures contracts and their default interest coupons had increased fourfold in six years. Nevertheless, over the course of the period, the mean floating reference interest margin fell by only 0.11 percent to 4.72 percent. They are then paid up in automatic to the lender's default interest payment which is almost always more onerous.

The research for Money Mail by Trussle, the on-line mortgages agent, revealed that some creditors were pushing such clients more. The Leeds Building Society allows a borrower with a 20 per cent investment to receive 1.54 per cent firm business for two years. Based on a £150,000 home loan average, £603 per month repayment.

As soon as this deals expires, buyers will move to its default variable rates at 5. 69 per cent a month and their month rates will leap around £335 to £938. Borrower with a 35 per cent  deposit who can get a 1. 39 per cent  two-year rate with Leeds BS would see an even larger leap in their repayments: from 592 to 938 - an additional 4.152 pounds a year.

It' got a 1. 69 percent two-year installment if you have a 20 percent down payment. For a £150,000 loan the amount repayable per month is £613. Meanwhile, its default var is 4. 99 percent rat. NATOWest has the smallest gap between what new and faithful clients are paying. There has a 2. 18 percent two-year fix for borrower with a 20 percent investment.

Deposits amount to £642 per month. By the time this deals expires, they will end up on a default Variable Rates of 3. 99 percent, where month rates will rise to £791. Britain's largest creditor, Halifax, has a 1. 77 per cent two-year fixation for those with a 20 per cent investment. At the default variables rates of 3. 99 per cent, homebuyers are paying an additional £2,052 a year.

According to analysts, these creditors have no justification for not lowering floating rate standards in recent years. Commenting on the report, Dominik Lipnicki, of Your Estate Decisions, a real estate agent, said: "What other reasons do creditors have to keep floating rate standards high than to increase their earnings? Even more serious, these clients will be the first to be affected by higher interest payments.

Ishaan Malhi, Trussle CEO, says: "Lenders need to become better at informing clients when a transaction is closed and when it's changeable. Several of them are the so-called "mortgage prisoners" who cannot move to less expensive business because they do not comply with the stringent new affordable pricing regulations imposed by the recent credit crunch.

By the end of the year, bankers and bausparkassen said they' ll be writing to tens of millions of "prisoners" and outlining lower priced offers that might be available if they met the terms of the agreement. Bankers say they are writing to clients up to three month before their first transaction is due to expire to declare alternatives to the default tariff.

Although floating interest loans can be used by default borrower to repay higher interest charges, they usually have smaller mortgage loans, and depending on their circumstances, this type of loan can give them greater latitude in overpaying or early repayment.

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