Santander - mortgage increase

moaffy

Hi,

My mortgage by default is now with Santander. Originally we took out our mortgage with Abbey who then got bought out by Santander. We took out a tracker mortgage three years ago that confirmed that our interest rate was at a set percentage above the base lending rate. Santander have now increased our mortgage by 0.5% although the base lending rate has remained the same! Does anyone know if this is a legal action as the agreement was signed at a set percentage rate with Abbey and no formal agreement has ever been signed with Santander?

GMS

What does your original mortgage offer say? If the rate reverts t SVR (Standard Variable Rate) then that can change. As long as Santander honour what was said then no problem.

SVR has recently risen as is the nature of such a rate. It is not linked to any base rate.

If you are unhappy with it you could look to move elsewhere.

Thrugelmir

moaffy wrote: »

and no formal agreement has ever been signed with Santander?

Have you ever read your mortgage terms and conditions in detail?

As you've agreed to many things over which you now have no control.

What % over base rate are you paying?

dunstonh

Does anyone know if this is a legal action as the agreement was signed at a set percentage rate with Abbey and no formal agreement has ever been signed with Santander?

A formal agreement has been signed with Santander. That would be the original mortgage contract or a later one if you bought a new deal at some point. The name change and logo makes no difference to the contract. Both parties have to comply with the T&C.

So, what does your mortgage contract say?

kingstreet

How long did your mortgage product track the base rate? Has it now ended?

If it has, what is/was the "reversion" or follow-on rate? Was is standard variable rate as suggested by the others?

If it is, it can be changed at any time and has no link to any other rate. The reversion rate will be shown in section 4 of your key facts illustration from when you took out your mortgage. It will says something like this;-

A variable rate which is 5.29% above the Bank of England Base
Rate, currently 0.50% for 2 Years, to give a current rate payable of
5.79%

Abbey, a brand of Santander UK plc (the lender)'s Variable rate,
currently 4.24% thereafter

This will also be shown in your mortgage offer. See page two, section 4. The reversion rate is shown underneath the grey box which sets out the initial product terms.