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Do you need to take out a current account in order to get a mortgage with lenders these days?

(8 Posts)
CantSleepWontSleep Sun 09-Nov-14 19:18:53

I keep finding mortgages that look good, and they don't state that you need a current account with them, but when you start filling out the forms they seem to suggest that you do need to have their current account.

We are happy with the current account that we have, but the mortgages with that provider are at v poor rates compared to others.

So far I've wanted to take out a mortgage with First Direct, who confirmed that I'd need their current account, and now Nationwide looks the same.

Is this now the norm? It's been over 13 years since we took out our last mortgage, when this def wasn't the case.

TalkinPeace Sun 09-Nov-14 20:43:49

A LOT has changed in 13 years
its going back to how it was pre 1988
but TBH having an extra current account is not a great hassle

NoArmaniNoPunani Sun 09-Nov-14 20:45:17

I think the best way to get a mortgage is through a broker.

Daisypps Sun 09-Nov-14 20:52:37

You definitely don't need a current account with a lender to obtain a mortgage with them. You will just need to provide recent payslips to evidence your income. They will all credit check you regardless of whether you bank with them or not.
Brokers will recommend the lenders that pay them the highest commission, I would recommend you do you're own research and the money facts website is a good place to start as they list all organisations and their rates. The key is not to focus on the headline rate but the APR as this reflects the true cost of the borrowing and includes ALL fees.

specialsubject Sun 09-Nov-14 21:34:56

that said, it takes under an hour to open a current account with a new bank.

KirstyJC Sun 09-Nov-14 21:38:45

We took a mortgage (4 years ago now) with a bank that gave us a better interest rate if we also had a current account with them.

We took it, opened the account, transferred some money in and then right back out the next day for about 6 months and then got fed up. So we wrote to them to ask if we did actually need to have the account and whether it would make any difference and they said no, so we closed it. And it didn't make any difference as we stayed on the lower rate.

They just say it to get you to change and then they think you will keep it and end up making it back in fees over the years. If your deal is about getting a better rate with a current account as well, I would do it and just keep it for a few months. And just keep your normal account.

CantSleepWontSleep Sun 09-Nov-14 22:46:17

Thanks all.
It looks like Nationwide do a couple that are exclusives for particular account holders who already have history with them, so we wouldn't qualify, but they still have another deal that would suit us fairly well. I'll give them a call tomorrow once I have confirmation that our offer has been accepted on the house we want.
Priorities for us are no (or very low) product fee, and no penalty for early repayment, together with a good rate for the first couple of years (hope to be able to pay it off fairly quickly).

FantasticMrsFoxx Sun 09-Nov-14 22:59:03

On two occasions I've had to take out a current account with a new bank to get their mortgage. (Barclays for Woolwich mortgage in 2004 and CoOp for Britannia mortgage in 2012). Doesn't bother me. I'm a 'rate tart' anyway and it's worth it to get the best mortgage deal.
Me and my OH both have our own CA and then the CoOp account is the joint account for the mortgage payments, bills, etc.
(I have to say I wouldn't choose CoOp out of choice - their online banking system is atrocious - but small price to pay for a great rate).

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