Lenders are increasingly using computerised customer profiling to decide what deals to offer existing borrowers in order to minimise the number of customers who move to a rival, according to online mortgage firm mform.co.uk.

Mortgage customers viewed as high-risk — and who could have difficulty finding a mortgage elsewhere — may therefore be offered only expensive, standard variable-rate deals by their present lender.

Systems sort borrowers into categories based on how likely they are to switch and the probability of them getting into trouble with their current loan. This profile dictates how to deal with customers coming to the end of deals.

“Most at risk are younger borrowers with less well-paid jobs who may be offered only standard variable-rate deals, typically around 7.25 per cent, while older, wealthier customers will be given the most competitive deals,” said Francis Ghiloni at mform.

“It is estimated to cost about 0.5 per cent more to sign up a new customer than keep an existing one,” Ghiloni added.

“However, it makes no sense for borrowers simply to accept what is offered by lenders.”         

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