Santander Changing Terms and Conditions

chrismuaythai

Back in 2006 I took out a mortgage with the Alliance and Leicester (now Santander). The Mortgage is a base rate tracker which initially was 1% below the base rate for 3 years and then switched to 1% above the base rate for the remainder of the loan period, so currently it’s still a pretty good deal.

When I initially took out the Mortgage I was paying back interest only and as the base rate decreased I switched to paying repayment. I have now paid off aprox 20% of the capital.
My wife and I are now expecting our first child and as we will be dropping on to one wage for 6 months to a year I would like to switch the mortgage again to pay interest only.
I contacted Santander to request this and I was informed that they have made changes to my terms and conditions whereby I can only switch to interest only if I have paid off more than 50% of the capital.
I wasn’t informed of the changes to T&Cs and I was not informed when I switched from interest only to repayment that it was a one way street! I have not missed a payment since taking out the mortgage and feel they should really be honouring the agreement that we made back in 2006

I have sent a letter and email to their complaints department over a week ago and have yet to hear anything.

[FONT=&quot]Has anyone else experienced this type of thing and is it worth fighting?[/FONT]

opinions4u

It's unlikely that your terms and conditions ever gave you the right to switch to interest only.

That would be a concession that isn't contractual. What is contractual is the monthly payment on a repayment basis.

I do get bewildered by the number of people who seem to think that the mortgage should be the first expense to be cut when childbirth is just round the corner.

chrismuaythai

[FONT=&quot]Thanks for the response, I’ll wait to see what I get back from the Santander. Enjoy your bewilderment....I would rather be sticking the capital somewhere that can earn me a bit of interest (more than 1.5%) which may buy a few nappies. I can always pay the chunk off when the base rate is increased.[/FONT]

opinions4u

chrismuaythai wrote: »

[FONT=&quot]Thanks for the response, I’ll wait to see what I get back from the Santander. Enjoy your bewilderment....I would rather be sticking the capital somewhere that can earn me a bit of interest (more than 1.5%) which may buy a few nappies. I can always pay the chunk off when the base rate is increased.[/FONT]

Bad font.

I'm with you now and what you're trying to do.

Makes sense. But unless you can find something in your original contract that states you can switch to interest only as and when you like I don't think your complaint has legs.

kingstreet

Interest-only with no repayment vehicle is becoming considered more risky and as a consequence lenders such as Lloyds, Santander and Nationwide have recently cut the percentage of a property value they will accept on interest-only. Only today, Nationwide has cut its maximum LTV for IO to just 50%.

As o4u has said, I doubt the freedom to switch between IO and repayment at will has ever existed and if the plan wasn't even in development at the last time you switched it's doubtful anyone could have warned you about it.

If you have written terms & conditions allowing you this freedom, take the matter up with the lender and if not satisfied at the end of the statutory period, escalate the matter to the Financial Ombudsman Service (FOS).

Thrugelmir

Santander have a maximum of 50% LTV and still require a repayment vehicle. Cash deposits are not considered a repayment plan.

If you mortgage was with A&L then that's where it still is. A&L will be a separate legal entity within the Santander group.

As Santander wish to run down the acquired A&L mortgage book don't expect any concessions.

There's zero grounds for a complaint.