Mortgage lenders are ignoring the old business saying that it is five times more expensive to win a new customer than secure a new one, one financial expert has claimed.
According to moneysupermarket.com, many consumers looking to renew their fixed-rate mortgage with the same lender are having to pay for their loyalty.
The firm says costs faced by homeowners can range from £500 to as much as £2,900.
Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said that with the number of mortgage applications on the decrease lenders should be doing as much as possible to retain existing customers.
"It's disappointing seeing lenders treating their existing customers this way. Loyalty should be rewarded, not punished. Instead these costs reflect pretty poor business practice," she said.
Figures from research conducted by moneysupermarket.com shows that Britannia is one of the worst offenders, charging customers a £1,999 arrangement fee.
Meanwhile, the firm recently described Nationwide's decision to raise rates on its tracker and fixed-rate deals as "another door slammed shut in the face of homeowners".
Re-mortgage:- JST Financial, New Mortgage, Re-mortgage Specialists catering for good and adverse credit for UK homeowners