Content area
Full Text
What do you do if you want to reach the entire country, but only have nine bricks-and-mortar sites in just two counties - Northamptonshire and Leicestershire? And how do you broaden your customer base to replace an ageing list of clients who are, literally, in danger of dying off?
For Market Harborough Building Society, the answer was easy: offer mortgages and savings products over the Web and, as an extra incentive to borrowers, give online buyers a discount.
"We had two major problems," explains chief executive Philip Dearing, "our cost base, although that is now at a reasonable level, and our customer base, most of whom were aged 50-plus. We had to find a way to bring in a younger age range to ensure the longevity of our society."
Early in 1999, Market Harborough became the first building society to offer mortgages online. Interest rates were cut from the start - by one per cent for variable rate mortgages and from base rate plus three quarters of one per cent to base rate plus 0.65 per cent for tracker mortgages. A five-year fixed rate mortgage has been launched as well, with online customers benefiting from a ten basis point discount - 6.25 per cent (APR 6.6 per cent) compared to 6.35 per cent (APR 6.7 per cent) for branch or telephone customers.
An online mortgage application tracking system was introduced in January, while "You-View" - which lets customers view all their mortgage transactions, including buildings and contents insurance, fees and charges - went live in September.
A similar service for savers will appear early next year. Savings...