Alliance + Leicester additional borrowing?

Inksleeves

We are planning an extension and need to borrow £50k to pay for it.

We are on a 1% plus BofE rate on a 136K mortgage with 14 years to run.

I rang A+L about additional borrowing and was expecting to be offered the Santander advertised rates for additional mortgages.

The A+L adviser/salesman told me that I was limited to an A+L additional mortgage product that is 5.49% plus base.


There is no info online anymore about A+L as they are completely rebranded as Santander...so how can they retain branding on this alone?

any advice?

kingstreet

If it hasn't been changed, your mortgage deed was executed by you and Alliance & Leicester plc, not between you and Santander. Therefore the responsibility for providing further advances still remains with A&L, despite that now only being a defunct branch of Santander.

Presumably, they are keeping products available because they have to, otherwise the option would be a much more expensive secured loan, not a further advance.

Thrugelmir

Santander bought the mortgage book of the old A&L. Legally this has remained a separate business to Santander itself while being within the same group.

A&L writes no new business. The existing mortgage book is slowqly being wound down. A&L had a policy of lending at a higher profile than Santander. So by maintaining the separate mortgage books existing customers have 2 options either remortgage (to Santander itself) or remain and accept the higher rate on offer.

This way Santander can control the business it accepts or declines. The higher interest rate of A&L representing the higher risk profile of the borrowers that remain. They remain as have no options at the current time.

Inksleeves

Thank you for the reply.


In that case I am likely to stick with A+L and bite the higher rate, we'll plan to over pay that additional mortgage to bin it early.

I can see no good in losing the 1% over base we have on the 130K mortgage. It'll save £25k over the next 15 years compared to a new loan.

That's part of the reason we are extending and not moving, A+L indicated they would not port the old mortgage to a new property.


Would anyone disagree?

Thrugelmir

Inksleeves wrote: »

A+L indicated they would not port the old mortgage to a new property.

Mortgages are not transferable. The term porting refers only to the current contract terms such as interest rate. So moving house requires a new mortgage application. As I commented earlier A&L is closed to new business.

Whether its worth staying or not. Depends on the total amount of borrowing you will have, once the extension is complete.

As 5.49% above base is expensive. More so if base rate were to rise. As it's not going to remain at current levels indefinately.

jill2002

If you are wanting to borrow extra, it will be through Santander via the A & L mortgage centre. As you are on a really cheap rate of interest you WOULD be able to port it if you decided to move house and take any extra on a separate deal probably lower than the additional loan rate. Why not ring A&L and get the full details.