Santander/Alliance & Leicester Mortgage

oldskin2

Hi All

This is my first time using this medium to connect to all you money savvy folks out there and I was wondering if anyone can answer this question for me.

I have an interest only mortgage which is or was with Alliance & Leicester which has been taken over by Santander some time ago.

On Santander's website for mortgages it states that their normal rate is 4.24% yet on the current mortgage I have with Alliance and Leicester my rate at the moment which is their standard rate is 4.99%.

Apart from applying for a new mortgage with Santander and incurring costs of £750 approx is there anything else I can do.

My mortgage has only 5 years to run with £40000 capital to repay .

It seems unfair to me considering I have all my banking and savings accounts with Santander that there should be this patent unfairness and I can't understand the reason why apart from them wanting to make more money.

Any comments from either those in the industry or others who are in the same position would be appreciated.

Many thanks

Thrugelmir

A&L wrote their mortgage book on a different risk profile to Santander. Your mortgage contract is with Alliance and Leicester. Hence the differential in terms.

So to obtain a better mortgage rate you'll need to switch lenders.

On your mortgage balance the saving may make this uneconomic. So overpay your mortgage if you are able and speed up repayment.

RenovationMan

I agree with Thrugelmir, you should try and overpay your mortgage and get rid of it as fast as possible, there is no reason to stick to the 5 year remaining term.

In the meantime, you could see if there are any fee-free alternatives out there that have a better rate, every penny helps. Just keep an eye out on any redemption clauses that might hit your overpayments.

Meeper

I understood that A&L had brought their SVR into line with the previous Abbey rate of 4.24%. If you are looking at your paperwork, it will still have the old figure, but you may find if you call them that the applicable rate is 4.24%.

oldskin2

Hi

Thanks for your reply but I am currently paying interest at 4.99% and my last letter from A & L states the same. Though I could clear the outstanding £40000 it would take most of my capital and because I am now unemployed and at 60 with little prosppect of returning to work I don't want to do that.
The other thing is would Santander consider me for a different mortgage as I only have a small private pension coming in but I do have the means to clear the mortgage if necessary or reduce it by at least half if required.

Thanks for your input.

RenovationMan

oldskin2 wrote: »

Hi

Thanks for your reply but I am currently paying interest at 4.99% and my last letter from A & L states the same. Though I could clear the outstanding £40000 it would take most of my capital and because I am now unemployed and at 60 with little prosppect of returning to work I don't want to do that.
The other thing is would Santander consider me for a different mortgage as I only have a small private pension coming in but I do have the means to clear the mortgage if necessary or reduce it by at least half if required.

Thanks for your input.

With those levels of savings aren't you preventing yourself from claiming unemployment benefits? Benefits that you have contributed to over a lifetime of taxation.

oldskin2

Thanks for that unfortunately when I was made redundant and went to sign on for the first and last time in my life they said that my private pension put me outside the threshold for getting any job seekers allowance, so much for paying into a system for 43 years. This refusal didn't even take into account any capital but I appreciate what you say about capital and claiming benefits. I don't want to claim if I can avoid it besides there are loads of newcomers to this country are more deserving than me.

ali-t

I have an A&L mortgage and took out extra borrowing a couple of times and this was at 4.99%. This seems to be their standard but I am remortgaging with them (on a different property) and am able to port the 0.something rate for part of it and then get 2.something% for the rest of the borrowing. Would they not let you remortgage on a lower rate than your are on and this would pay off capital as well as interest without increasing your payments?

RenovationMan

oldskin2 wrote: »

Thanks for that unfortunately when I was made redundant and went to sign on for the first and last time in my life they said that my private pension put me outside the threshold for getting any job seekers allowance, so much for paying into a system for 43 years. This refusal didn't even take into account any capital but I appreciate what you say about capital and claiming benefits. I don't want to claim if I can avoid it besides there are loads of newcomers to this country are more deserving than me.

You must be in receipt of a decent pension if it's already being paid before age 60 and it's affecting benefits!

I'm guessing it's going to rule you out of pensions credit too? I read somewhere that PensCred will pay the interest on a mortgage (upto a certain amount) so it could be worth qualifying pensioners leaving some of the mortgage unpaid when they reach state retirement age.

Thrugelmir

oldskin2 wrote: »

Though I could clear the outstanding £40000 it would take most of my capital and because I am now unemployed and at 60 with little prosppect of returning to work I don't want to do that.

In five years time. You will still have this issue to resolve. So maybe you need to find a longer term solution.