Did Santander keep different rates for interest only and repayment mortgage quiet?e

Leonard1811

Last May we telephoned as usual to check fixed rate products for our interest only mortgage and as always we asked for details should we change to repayment. I hadn't long been offered a permanent contract so we asked if we could change to repayment at any time if we wanted to and the response was yes. The cost of the repayment seemed a bit too much to take on when my contract was unsteady. Things have changed and we called yesterday to ask about repayment and a home improvement loan. The discussion centred around the fact that repayment and interest only mortgages bring very different interest rates on a fixed rate. Too our surprise we are on 4.49 but if we change to repayment it is 2.99 which we would have snapped up last may had we been told rather than being quoted the same rate for both types or mortgage. Now we are told that we can change now but as we are tied in until sept 2015 and we will incur a 6k penalty. I have had conversations with 2 Santander people today both who quite understood my upset and then when we were put through to another department I was met with a very defensive response suggesting that it was my fault for not asking about differing rates. I had hoped that asking for quotes for the best fixed for 2 years repayment and interest only rates that I would have been provided with them rather than predicting what they might offer. I have never heard before of a differing rate. Should I be tempted to take it further and query why we were not given info about our best possible rates?

Thrugelmir

Lending policy and the products on offer may well have changed in the intervening period.

What precisely is your issue as difficult to comprehend from your initial post.

Leonard1811

I agree. It is definitely a possibility that these differing rates may well be a new thing which is why I had hoped Santander could clarify. My issue is that we want to transfer to repayment and have been offered 2.99 opposed to our current 4.49 but our penalty would kick in which is a bitter pill to swallow at the best of times. If it was the case that the 2.99 was available to us on a repayment last May we would have taken it then thus we wouldn't be having to weigh up a 6k penalty now. It is a matter of whether we were given the info to make an informed decision a year ago.

Thrugelmir

What you describe is not how the mortgage market operates. A product on offer today would not have been on offer last May. The lender would have given you all the options last year. You choose to take a fixed term product. You accepted the terms on offer.

Because they now offer a better product is just the way the cookie crumbles.