Many borrowers assume that mortgage lending decisions are made on a level playing field. Whether you are an existing customer or a new applicant, the expectation is that the same criteria apply and the same rules are enforced.
In 2026, that assumption is increasingly incorrect.
Across both high street banks and specialist lenders, we are seeing a clear divergence in how existing borrowers are treated compared to new applicants. While headline criteria may appear identical, the underwriting approach, flexibility, and risk tolerance applied behind the scenes often differ materially.
At Willow Private Finance, this distinction is becoming one of the most important strategic considerations when advising clients on remortgaging, refinancing, or restructuring debt. Understanding how lenders view existing relationships versus new risk is now critical to securing the best outcome.
The shift is not arbitrary. It is a direct response to the volatility lenders experienced during the 2023–2025 period.
In that environment, lenders learned that historical borrower behaviour is one of the strongest indicators of future performance. As a result, banks are placing greater value on known risk than theoretical affordability.
An existing borrower with a clean payment history represents a proven data set. A new applicant, even with strong income and assets, represents uncertainty. In a market where lenders are focused on risk containment rather than rapid growth, that distinction matters.
For existing borrowers, lenders already hold substantial behavioural data. They know how the client manages repayments, whether payments are made early or late, and how the account performs under stress.
In 2026, this behavioural track record often carries more weight than marginal changes in affordability calculations. Where a borrower has demonstrated consistency, lenders may show greater tolerance around income variability, loan structure, or term length.
This does not mean existing borrowers are immune from scrutiny. However, lenders are more likely to work with a known borrower to retain the relationship than apply rigid criteria designed for new risk.
By contrast, new applicants are assessed almost entirely on projected affordability and documented evidence. There is no behavioural safety net.
In 2026, this has led to tighter interpretation of income, more conservative stress testing, and less flexibility around edge cases for new-to-bank clients. Even borrowers who would have been approved easily in 2024 are now finding that lenders apply stricter judgement when there is no prior relationship.
This is particularly noticeable for applicants with variable income, complex structures, or international exposure. Without an existing relationship, lenders default to caution.
Another underappreciated difference lies in product availability.
Existing borrowers are often offered retention products that are not available on the open market. These may not always be the lowest headline rates, but they frequently come with softer underwriting, reduced documentation requirements, and greater certainty of completion.
New applicants, on the other hand, are assessed through full underwriting pipelines, even when applying for similar products at similar rates. The friction cost is higher, and so is the risk of reassessment or delay.
This distinction is increasingly relevant in 2026, where certainty and speed often matter as much as pricing.
One of the most significant differences we see involves affordability reassessment.
For existing borrowers, lenders are often willing to anchor affordability to current repayments, particularly on like-for-like remortgages or product transfers. For new applicants, affordability is assessed in full, using updated stress rates and expenditure models.
This means a borrower who can comfortably remain with their existing lender may struggle to move elsewhere, even if rates appear similar. The difference is not income, but lender familiarity and perceived risk.
This divergence has profound implications for borrower strategy.
In earlier cycles, switching lenders was often assumed to be the optimal route to better pricing. In 2026, that assumption needs to be tested carefully.
For some borrowers, remaining with an existing lender offers greater certainty, fewer conditions, and reduced execution risk. For others, moving lenders is still beneficial—but only if the case is structured with full awareness of the higher scrutiny applied to new applicants.
This is why remortgaging decisions in 2026 must be strategic rather than purely rate-driven, as explored in our article on Five Strategic Reasons to Remortgage Beyond Just Rate Drops.
A common scenario we see involves a borrower with a strong repayment history who qualifies comfortably for a product transfer with their existing lender, but fails affordability when applying elsewhere for a marginally lower rate.
The issue is not affordability in real terms. It is the difference between known and unknown risk.
Without understanding this dynamic, borrowers can inadvertently increase friction, delay transactions, or lose certainty for minimal financial gain.
In 2026, the question is no longer simply “Who has the best rate?” but “Where am I treated most favourably?”
Existing relationships, repayment history, and lender familiarity now materially influence outcomes. Switching lenders can still be the right move—but it should be a conscious, informed decision rather than a default assumption.
Willow Private Finance advises clients across both retention and new-lender strategies. We assess not just headline rates, but how lenders actually behave when underwriting real cases in 2026.
By understanding lender psychology, relationship dynamics, and execution risk, we help clients decide when loyalty pays—and when moving lenders genuinely delivers value.
This approach is particularly valuable for borrowers with complex income, higher loan sizes, or time-sensitive transactions where certainty matters.
Q1: Are existing borrowers treated more favourably in 2026?
A: Often, yes. Lenders place significant value on proven repayment behaviour and existing relationships.
Q2: Does this mean switching lenders is a bad idea?
A: Not necessarily, but switching now carries higher scrutiny and should be assessed carefully.
Q3: Are retention deals always better than new products?
A: Not always on rate, but they often offer greater certainty and smoother underwriting.
Q4: Do lenders still reassess affordability for existing borrowers?
A: Yes, but affordability is often applied more flexibly for like-for-like transactions.
Q5: Can a broker influence how lenders treat a case?
A: Yes. Strategic lender selection and case presentation significantly affect outcomes.
Book a free strategy call with one of our mortgage specialists.
We’ll help you find the smartest way forward—whatever rates do next.
About the Author
Wesley Ranger is the Director of Willow Private Finance and has over 20 years’ experience advising clients on UK and international property finance. He specialises in strategic mortgage planning, complex underwriting cases, and helping borrowers navigate lender behaviour during changing market cycles.
Important Notice
This article is for general information purposes only and does not constitute personal financial advice. Mortgage products, lending criteria, and affordability assessments vary by lender and are subject to change.
Your eligibility will depend on your individual circumstances and lender policies. Always seek tailored advice before committing to any financial arrangement.
Willow Private Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA No. 588422). Registered in England and Wales.
