Santander Mortgage Renewal Shocker - PLEASE HELP!

heathrowairport

Hi all,

New to the forum - would appreciate your help.

In short.

Me:

Interest only mortgage, 5 years unblemished record, 901 (good) Experian score, under 60% LTV.

Mortgage has just switched from 2.99% fixed to SVR at 4.74%.

Have been offered 4 new deals the best of which is 4.59% fixed for 2 years with 3% tie in with a £699 fee. This has increased from a 3.39% fixed deal offered 2 months ago with no fee (yes, I know - should have taken the deal).

The new rate is a 'loyalty rate' although after an hour conversation with Santander this afternoon, they can't tell me what the loyalty is based on....given that a non loyalty rate (new customer) is way lower in all bar one mortgage available for new customers.

I see this as clear profiteering given where the BOE rate currently is. Also, all of the 4 options effectively amount to the same thing.

it's a stupid question but is there anything I can do about this as I can't afford a 50% hike in mortgage payments.

I think remortgage may be difficult due to a) interest only status and b) income proof.

Any help, guidance would be much appreciated. I think Santander are abusing their position and that this is a disgrace.

martinsurrey

Without a repayment stratagy or proof of income, which you dont have by your own admission, you are higher risk, and as such will be charged more...

guidance would be, get the relivant paperwork to prove your income (are you self employed? if so for how long, and income?) and change to a repayment mortgage.

_Andy_

No other lender is going to help you.

In terms of 'profiteering', well of course it is - are you suggesting they shouldn't make profit? Every company exists to make profit.

To be blunt, if you can't afford IO payments at 4.XX% you should be looking to sell up.

kingstreet

Banks cannot borrow at the BoE base rate, so suggesting they are profiteering by charging more than that is daft. They have savers to pay or they raise money in the moneymarkets. Neither of those funding sources are accepting 0.5%pa as their return.

If their customer retention products aren't very good, which they often aren't as lenders (oddly IMHO) are always more concerned at getting new borrowers than they are in keeping good paying existing ones, have a look at remortgaging elsewhere. There are plenty of deals where there are no transfer fees and good rates.

I suspect as an interest-only borrower, Santander is anxious to get rid of you and is offering you products which you are likely to turn down. Another IO borrower last week was told they had nothing to offer him.

mrginge

So five years ago you got a cheap option that you were probably very happy with. I bet Santander weren't the bad guys then were they.
Short term gain for long term pain i'm afraid.

heathrowairport

Appreciate the honesty and negativity but as an ex mortgage broker, I am not a fool.

I know I can move away from Santander and yes, I probably would be able to prove income if it came to it. And for clarity, no, I wasn't complaining when offered 2.99% 5 years ago.

What I am complaining about is is why my renewal rate has risen 1.5% from what was quoted 6 weeks ago. 4.59% fixed for 2 years with for 51% LTV, good credit rating etc. is a joke and in my view taking advantage of an existing customer. In adittion, what element of a 'loyalty' rate is it?!

heathrowairport

kingstreet wrote: »

Banks cannot borrow at the BoE base rate, so suggesting they are profiteering by charging more than that is daft. They have savers to pay or they raise money in the moneymarkets. Neither of those funding sources are accepting 0.5%pa as their return.

If their customer retention products aren't very good, which they often aren't as lenders (oddly IMHO) are always more concerned at getting new borrowers than they are in keeping good paying existing ones, have a look at remortgaging elsewhere. There are plenty of deals where there are no transfer fees and good rates.

I suspect as an interest-only borrower, Santander is anxious to get rid of you and is offering you products which you are likely to turn down. Another IO borrower last week was told they had nothing to offer him.

Re your last paragraph, yes, very possible.....

Dave_Ham

Its not just the interest only, I have had a couple of clients recently offered terrible deals to stay with Santander...

Not sure where to go, think you have to suck it up and take the mortgage hike as you either can prove income and can go elsewhere or you cannot and stay where you are.

Interest only is not a dealbreaker as at 50/60% LTV, sale of mortgaged property can be used with some lenders...

Simon_gloster

heathrowairport wrote: »

Hi all,

New to the forum - would appreciate your help.

In short.

Me:

Interest only mortgage, 5 years unblemished record, 901 (good) Experian score, under 60% LTV.

Mortgage has just switched from 2.99% fixed to SVR at 4.74%.

Have been offered 4 new deals the best of which is 4.59% fixed for 2 years with 3% tie in with a £699 fee. This has increased from a 3.39% fixed deal offered 2 months ago with no fee (yes, I know - should have taken the deal).

The new rate is a 'loyalty rate' although after an hour conversation with Santander this afternoon, they can't tell me what the loyalty is based on....given that a non loyalty rate (new customer) is way lower in all bar one mortgage available for new customers.

I see this as clear profiteering given where the BOE rate currently is. Also, all of the 4 options effectively amount to the same thing.

it's a stupid question but is there anything I can do about this as I can't afford a 50% hike in mortgage payments.

I think remortgage may be difficult due to a) interest only status and b) income proof.

Any help, guidance would be much appreciated. I think Santander are abusing their position and that this is a disgrace.

Timings and greed!!!

withabix

Santander savings rates are reducing and mortgage rates are increasing.

= they have met their targets in terms of 'base load' and are now being less generous.

Don't forget they had market-leading rates for savers and borrowers until the last few months (NOT sustainable - a bit like an IO mortgage;)) , so any change is likely to be a change for the worse.

If you want a better mortgage deal, apply for a repayment mortgage maybe?

helpmeee

Switch to the 123 account then a month later call them asking for deals

i have a IO mortgage of 720k on their svr. my new deal is now 2.99 for 2 years happy days!!!!

i did have to find 16k though but then my ratio is a lot less then yours.

before the 123 account, they were offering me 4.7 something and that too with a 140k top up which i just could not afford.

Also the 123 account is actually really good. i got back about 15 pounds this month. You even get money back on your abbey mortgage, council tax and gas/electric bills.