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  • FIRST POST
    • QuotesUK
    • By QuotesUK 10th Feb 18, 2:24 PM
    • 3Posts
    • 0Thanks
    QuotesUK
    Santander Follow On Rate
    • #1
    • 10th Feb 18, 2:24 PM
    Santander Follow On Rate 10th Feb 18 at 2:24 PM
    I have a Standard Variable Rate Mortgage with Santander. They have offered me the option to switch to a Base Rate Tracker, a Follow On Rate, which is currently cheaper.

    In February 2018, the SVR is 4.74%, the FOR is 3.75% (Bank of England base rate plus 3.25%)

    As we all know the Bank of England rate is likely to increase, so the FOR rate will increase. But Santander will probably increase the SVR too. Once you switch from SVR to FOR you canít go back.

    Santander passed on the recent base rate increase, so what would be the benefit of staying on SVR?
Page 1
    • kingstreet
    • By kingstreet 10th Feb 18, 3:24 PM
    • 32,870 Posts
    • 17,704 Thanks
    kingstreet
    • #2
    • 10th Feb 18, 3:24 PM
    • #2
    • 10th Feb 18, 3:24 PM
    You're being offered a customer retention product. The follow-on rate is what you get automatically at the end of a special offer, for example standard variable rate after a two year fix.

    Why not ask Santander about its fixed rate customer retention products, or look to remortgage elsewhere as this can often be done without cost?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • QuotesUK
    • By QuotesUK 10th Feb 18, 3:38 PM
    • 3 Posts
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    QuotesUK
    • #3
    • 10th Feb 18, 3:38 PM
    • #3
    • 10th Feb 18, 3:38 PM
    A credit reference issue currently blocks new lenders and the fixed rate deals from Santander arenít attractive. FOR is only automatic for new products.

    However, given the choice between SVR and FOR, I am interested in knowing why anyone would want to stay with SVR.
    • kingstreet
    • By kingstreet 10th Feb 18, 3:42 PM
    • 32,870 Posts
    • 17,704 Thanks
    kingstreet
    • #4
    • 10th Feb 18, 3:42 PM
    • #4
    • 10th Feb 18, 3:42 PM
    Does the tracker have any early repayment penalties?

    If it does, there is your answer.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • QuotesUK
    • By QuotesUK 10th Feb 18, 4:25 PM
    • 3 Posts
    • 0 Thanks
    QuotesUK
    • #5
    • 10th Feb 18, 4:25 PM
    • #5
    • 10th Feb 18, 4:25 PM
    There are no fees or early repayment charges. The only difference is the FOR rate is determined by the bank base rate instead of the SVR rate which is set by Santander.
    • Thrugelmir
    • By Thrugelmir 10th Feb 18, 5:53 PM
    • 57,408 Posts
    • 50,702 Thanks
    Thrugelmir
    • #6
    • 10th Feb 18, 5:53 PM
    • #6
    • 10th Feb 18, 5:53 PM
    Santander passed on the recent base rate increase, so what would be the benefit of staying on SVR?
    Originally posted by QuotesUK
    Very little. Seems as if the SVR is being phased out. You are better off taking a 5 year fix rate product at a lower rate of interest. Then reconsidering your options at the of the term.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
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