Santander - reasonable ?

DavidW11

Hi all,

I have a mortgage rate due for renewal. I have 2 parts to my mortgage, 1 part interest only which is covered by an on track endowment, which has 4.5 years to run, and a repayment part.

I want a 5 year fixed rate, but Santander wont give me it as it exceeds the term of my Interest only part. I am obviously happy to pay the interest for 6 months more then redeem that part.

They wont allow me to do this and insist I need to take a 3 yr fixed, and then to SVR for the last 1.5 years. We all know that interest rates must be significantly higher in 3 years time, and this to me is just an attempt to make me pay more later.

Is this reasonable?

ACG

If you put it on repayment im sure they would allow you to have a 5 year fixed rate. The issue comes because its interest only.

Thats their criteria not just for you but for everyone.

DavidW11

Thank you for your reply.

I hadn't considered that as an option, but will do so now

ACG

No probs - watch me be wrong now :-P

Ask them what options there are available. They might not be able to advise but they can inform you of the options to make an informed decision.

DavidW11

You were right!

I was able to put the repayment part (term longer than5 years) on the 5 yr rate, but they refused even a term extension to allow me that rate, unless, as you suggested, I switched to repayment. It is now on a 3 yr rate, meaning I will be stuck with the (presumably much higher than now) SVR, for 1.5 yrs till the endowment matures.

Very frustrating, and I feel their inflexibility is to ensure they get me to pay more in the longer term.

Thanks again.
David.

ACG

Its not, as there is nothing stopping you moving elsewhere when you are on the SVR.

Assuming your paying a normal rate and not 0.5% above base for example im sure they would rather keep you as a customer but they have their criteria to protect their revenues (if were honest, they are a business and theyre in this game to make money). I would not take it personally. Things have changed a lot in the last few years, Interest only mortgages are extremely difficult to get - you never know that may change in 3 years time.

You could also potentially cash in the endowment and pay off the balance if it makes sense to do that in 3 years time.