It is almost impossible for a high street bank to turn a profit at the moment with their traditional income streams being hit by the pandemic and there are more pressures to come.
Kate Palmer of The Sunday Times writes: "Ultra-low interest rates, a looming recession and sudden shift in people’s spending habits due to coronavirus mean that banks are having to redefine totally how they treat their customers."
Virgin Money, for example, which will only offer a 90 per cent mortgage on a seven-year fixed deal, charges 2.99 per cent with a £995 fee, or 3.09 per cent for the same period with no fee.
Aaron Strutt, product director at Trnity Financial, told The Sunday Times: “Banks are keen to keep borrowers for longer by locking them into these long fixes. And they will be strict in imposing early repayment penalties for anyone hoping to get out of their deal early.”