New To Bank
New to bank (NTB) is a term used by lenders internally to describe new customers that they are dealing with for the very first time.
This means that the lender has do data collected of any dealings with a new client.
However, this usually don’t take failed applications into account.
For example, if a person has had a credit card application submitted to the bank and rejected, there might be no record of that in the bank’s internal computer systems that contain information of all their customers. So if the same borrower applies for a home loan years later, he can still be treated as a new-to-bank customer.
When a NTB customer has been identified by a lender, a more thorough procedure of due diligence check might be conducted compared to existing customer of the lender.
This would undoubtedly include typical know-your-customer protocols.
Mortgages for new to bank borrowers
It must be said that common sense tells us that an existing customer of a bank would be better treated by them compared to new customers who they have never dealt with before.
This is because the years of loyalty from existing customers and years of profits made from them would encourage a lender to reward long time customer with better products, better terms, and better interest rates.
However, this is seldom the case in the Singapore housing loan market.
Lenders are commonly observed to reject existing borrowers’ request for re-pricing, better terms, or equity loans. Indirectly inviting them to bring the mortgage away to a competing bank with refinancing.
Yet offer very good terms to new to bank borrowers, sometimes much better than what existing customers are enjoying.
It is a common sight to see existing customer with mortgage rates such as 3% and NTB borrower offered 2%.
The general advise is that if you feel that your present lender is not treating you fairly, then moving your housing loan to another bank is something that you should definitely explore.
They might give your the best rates as you now become then NTB customer. What irony.
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