Nationwide says remortgaging business has rocketed tenfold through its branch network since it sparked the mortgage war with rival Halifax in February.
The UK's biggest building society says branch managers report they are processing more mortgage business than ever before.
Although IFAs continue to record plummeting new mortgage sales with the society, claiming cheaper loans are available elsewhere, Nationwide says borrowers of rival lenders are flocking to it to remortgage.
The society says around 25 per cent of its remortgaging borrowers have “unsurprisingly” switched from Halifax while up to 15 per cent of new customers have come from Abbey National.
Nationwide attributes the ballooning remortgage sales to increased public awareness of how lenders “rip off” existing borrowers on high variable rates to subsidise discount deals for new customers.
While reluctant to issue figures for fear of putting its competitors at an advantage, the society says the boost in business is an early sign that its policy of dropping discount loans and introducing a lower base mortgage rate is paying off.
A spokesman says: “The fewer people there are on a high standard rate, the greater pressure there is to get rid of loss-leading products and create a fairer market for loyal borrowers. Although it is early days, the business we are doing is a helpful indication that our strategy is working.”
A Halifax spokeswoman says: “We are performing very strongly both in terms of new business and in retaining our existing borrowers.”
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Scottish Amicable is set to enter the unregulated mortgage broker market in a bid to boost sales through its Premier Mortgage Service.
ScotAm national mortgage manager John Malone believes the move will res-ult in Premier getting up to £20bn in mortgage applications next year, which is around £5bn up on this year's projected figure.
Premier previously dealt exclusively through IFAs and appointed agents but Malone says the move will have “no impact whatsoever” on the mortgage club's existing distribution channels.
He believes many IFAs are already opening up unregulated mortgage offshoots of their core business in a effort to comp- ensate for falling revenue in other areas of the market such as stakeholder.
Malone says Premier will be targeting unregulated brokers but will also look to forge ties with unregulated national firms such as Chase de Vere Mortgage Management.
He says: “With statutory regulation, mortgage code compliance board require-ments and compulsory qualifications on the horizon, we see it as a good time to develop relationships with quality unregulated brokers. We estimate they could add an extra £5bn to our origination book next year.”