Virgin One has claimed a grow-ing number of mortgage brokers will have to recommend current account mortgages (CAM) in the post-regulatory environment.
NOP research into customer satisfaction, commissioned by the lender, revealed 55% of Virgin One account customers were extremely satisfied with their accounts, and 82% said they would not move their mortgages even if they moved home.
Although Scott Mowbray, marketing manager at the Virgin One Account, admitted they were not suitable for all, he said regulation would make it vital brokers give ‘best advice,’ and since customer satisfaction was so high, it could make it difficult for brokers not to recommend CAMs.
‘Satisfied customers are what best advice is all about and it is reassuring to see the all-in-one account model delivering great customer satisfaction. The study has shown customers need more than a low interest rate to keep them happy.’
On the strength of this, Virgin One has called for the industry to set up best advice customer satisfaction tables.
Mowbray added: ‘We need tables that will help customers ‘ and potentially IFAs ‘ differentiate between products based on more than price. Many lenders put too much focus on price and selling individual products, rather than delivering the automatic benefits of all-in-one mortgages. The result is that they acquire expensive business, using discounted pricing methods, and unsatisfied customers who are more likely to churn and be churned.’
Frank Eve, managing director of Frank Eve Consulting Limited, who co-ordinated the survey, agreed: ‘The results show that when the concept of integrating savings and borrowing is understood by the consumer they become less likely to change their product provider, and so are a much more profitable customer for their lender or bank.’
However, CAM and offset mortgages account for only 15% of net new lending, and many lenders remain unconvinced.
Matthew Cape, public relations controller at Chelsea Building Society, said: ‘We are always looking at what products are attractive to borrowers, but we have never had a high percentage of requests for current account mortgages.’