Santander - wont let me stop overpaying on my mortgage!

JS600

I took out a mortgage with Santander in 2006. In 2010, faced with a 2 1/2 hour round trip commute I decided to move closer to work. Given the property market at the time there was little point in selling so purchased letting consent from Santander and I rented out the flat.

I have altered the term on my mortgage numerous times since I've had it - overpaying when I could afford it, and increasing the term to reduce the payments when I initially moved out of the flat and began renting it. Each time I have reduced the term, I have checked that it would be OK to increase it again should circumstances change. I last changed the term in July 2012 when I reduced it to 12 years.

In November, I decided to increase the term. Upon phoning Santander I was told their criteria have changed and I would have to undergo a telephone interview to check I could afford the revised payments. In the past all that changing the term has involved was a quick phone call and signing a piece of paper. No problem though, I thought, given the revised payment would be lower if I extended the term. However, upon finding out that the flat was rented out, they refused my request to extend the term saying they cannot increase the term on mortgages where the property is rented.

In my view, I was voluntarily overpaying - and now they wont let me return the mortgage to its original term (ie 19 years remaining)!

I complained, although they immediately texted me saying my complaint had been answered - which I hadn't. I have asked them to reopen the complaint, next step is the Ombudsman I guess.

I would suggest this is of concern to anyone currently overpaying on a Santander mortgage.

kingstreet

No comfort to you now, but I always suggest any overpayment be made voluntarily without a formal reduction in the term. The end result will be the same, but without the contractual obligation to the shorter term and the higher monthly payments which go with it.

Santander has been peeing everyone off this year, for one reason or another. Come the new year and the new targets and mooted relaxation of some of its more "draconian" practices, I can see it struggling to lend. Bridge-building must follow soon, otherwise, it will struggle to achieve its "funding for lending" target.

Staunch "Abbey-supporting" brokers have been deserting the lender in droves in the recent past.

Thrugelmir

JS600 wrote: »

In my view, I was voluntarily overpaying - and now they wont let me return the mortgage to its original term (ie 19 years remaining)!

I complained, although they immediately texted me saying my complaint had been answered - which I hadn't. I have asked them to reopen the complaint, next step is the Ombudsman I guess.

Santander are within their rights to decline your application. Difficult to see what grounds your complaint will be upheld on.

The lesson should be not to alter contractual terms. Making over payments is in itself sufficient. As this allows flexibility.

holly_hobby

There is no merit in complaining, as once the mge agreement was changed to consent to let (ie a commerical basis), all resi bets were off as you are effectively operating o/s of the std mge T&Cs (albeit with the lenders tacit agreement).

Therefore they call the shots I am afraid .... what you could do is remortgage onto a std BTL and re-extend the mge term ... this may involve exit and new mge fees (which may be mitigaged via sourcing a fee free remortgage deal), and of course you will have to meet std BTL criteria, of rental income and possibly min salary restrictions (ie 25k).

Hope this helps

Holly

opinions4u

You seem to have got confused.

Overpaying is one thing.

Changing the term is another.

They aren't forcing you to overpay the term that you asked for previously.

They are merely saying you can't extend the term for a longer period.