Santander Mortgage Stuck on Standard Rate

steeeb

Isn't this out of Santanders hands somewhat anyway? Don't new rules now prevent them from offering a fixed rate mortgage to someone in there opinion doesn't meet affordability criteria?

They could change there criteria but likely need to increase there rates to account for such change in risk.

In any case, you are a greater risk for the lender. It's not fair someone with a 30% LTV can get a better rate than someone with a 90% LTV - and that person on 90% is 'stuck' with worse details. The fact is, the 90% LTV is a higher risk.

This is the way the world works. All of this was clear before you took the mortgage. Falling on hard times is always a possibility and having a strategy in place for when/if this happens would have meant you could have got the fixed rate - because you planned and are a lower risk. You didn't so you are a higher risk.

You've done well to carry on paying the mortgage so you aren't forced in to selling - but you won't get a better rate until you improve your circumstances. How can anyone not see this as fair game? It's easy to see it as "oh, they're taxing the poor" or whatever, but the fact of the matter is you're a higher risk, and it's as simple as that. Nothing else matters.

Joe_Bloggs

Revolt grows against bank that 'exploits mortgage rate prisoners'

Perhaps StepChange should negotiate with Santander and other potential mortgage lenders on behalf of their clients as the debt management plan has backfired in this case.

J_B.

amnblog

steeeb wrote: »

Isn't this out of Santanders hands somewhat anyway? Don't new rules now prevent them from offering a fixed rate mortgage to someone in there opinion doesn't meet affordability criteria?

Quite the opposite


The new rules specifically give Lenders the option for 'transitional arrangements' so as not to penalise borrowers who do not meet criteria under the new rules.


The FCA state their rules 'only require an affordability check where there is additional borrowing, or a material impact on affordability.'


The FCA have 'allowed Lenders to make their own assessment about make exceptions to interest only and affordability rules.'


In other words the decision on what can be done on a straight product switch rests solely with the Lender.

mrginge

Ah the debate moves on....
Now we want to force a lender to offer deals to customers who are outside their lending criteria.

The end result of course being that everyone, regardless of circumstances ends up on the same deal.

Leon_W

Kingstreets post is one of the best I've read on this topic. Yes you are being ripped off by Santander. The reason ?? Because they can.


It really is as simple as that.


Halifax do the same to interest only borrowers. No you can't have a new deal because you can't afford a repayment mortgage ? What's that all about ?


I truly believe that you are being treated unfairly. It really can't be right that you are MADE to pay MORE because of stupid affordability rules applied halfway through the game. If they applied the transitional rules as they were designed to be applied then you would be treated equally.

kingstreet

If other lenders can offer retention deals to existing borrowers experiencing problems away from their mortgage, it makes any suggestion that Santander is somehow restricted or prevented by regulation from doing so sound very, very hollow.

We're looking at interest rate increases in the not too far distant future. If a lender offered nothing more than a five year fix at a rate just below SVR (above the rates offered to new borrowers) but to provide stability to borrowers vulnerable to future rate rises they would be lauded for forward-thinking and trying to protect customers.

No-one is suggesting they should offer a two year fix at under 2%.

dunstonh

Kingstreets post is one of the best I've read on this topic. Yes you are being ripped off by Santander. The reason ?? Because they can.


It really is as simple as that.

its not as simple as that though. Santander have decided for a commercial reason to obtain special pricing deals financed externally that do no include high risk borrowers. We dont know if that is Satander doing it for profitability reasons (increasing their margins) or that they are unable to obtain funding if they dont do that (or obtain funding at terms that allow their deals to remain competitive).

We will never know at our level as it is commercially sensitive. However, a counter argument is that if they did offer it and the deals available had to price in that extra risk, then more borrowers would lose out compared to the minority that would gain from it. So, does that make it any more fair than the alternative?

kingstreet

As a matter of interest, does Santander have the right to obtain ongoing credit data about its borrowers, as it appears there isn't a formal application process.

The lender seems to know the borrower has problems and is able to say there is nothing available without seeking consent to undertake a credit search?

Leon_W

Principle 6 : A firm must pay due regard to the interests of its customers and treat them fairly.


Yes, I can see where you're coming from dunston, of course I can, but it's this sort of behaviour that just grates me. It goes against everything in what principle 6 above should stand for.


Another one. Porting a mortgage. The rules allow for borrowers to port their mortgage to a new property without all this affordability stuff (no extra borrowing excepted) getting in the way. Do they let people do it ? No. Because ? Customers have to ditch their comfy trackers and take out more expensive loans. Once the money is lent, in my view, you can't keep re-underwriting the loan to suit your own ends at every twist.

kingstreet

Issue being discussed here;-

http://blog.moneysavingexpert.com/2014/11/10/are-mortgage-affordability-rules-stopping-you-getting-a-cheap-remortgage/?_ga=1.3491120.1028758292.1400861519