Santander early Redemption

DCaraher

Just had a conversation with Santander Mortgages that you may find interesting.

I am in the process of paying off my mortgage early. I requested a redemption figure and was surprised to see that my latest repayment was not shown despite the fact that it had left my current account 4 days ago. My current account is also with Santander.

When I questioned why my payment was not showing I was told it takes 10 days to clear.... 10 days for a transfer within the same bank!!!

I was then advised to pay the larger redemption fee to avoid interest charges and Santander would refund the unallocated monthly payment in full. I asked how long it would take to receive this refund....... 13 days.

In summary money left my account 4 days ago will not clear for another 6 days, and if I overpay my mortgage redemption I wont see my refund for a further 13 days.

I wonder what Santander would do with my funds for 23 days!

Anyone had similar experiences?

SouthLondonUser

I didn't understand. Let's say you made the payment on the 1st but that it only show sup on the 11th. Is Santander charging you extra interest for those 10 days? I very much doubt that is the case.

Or is the case that Santander takes 10 days to allocate the interest but, once it does, your next instalment is calculated by taking into account that you paid on the 1st? If I were to bet I'd guess this is what's happening. I am not saying it is acceptable in this day and age - just that it is different from being overcharged interest.

DCaraher

The question isnt around interest charges. If a payment to my mortgage account left my current account, why does it take 10 days to allocate the credit.


If I access my mortgage account on line it shows the balance correctly, i.e. the payment has been allocated.


However if I ask for a redemption figure the balance does not include the latest payment. I am being told it takes 10 days to allocate the payment although the online balance reflects the payment.


The reason this is an issue is that all this is being tied into an equity release deal where the released funds will pay off the mortgage, and currently there will be a shortfall.


The simple solution is to wait another 6 days request a new redemption figure and then use the equity release to pay off the mortgage. But why should I have to wait 10 days for a payment to be credited to my account?

dunstonh

I am in the process of paying off my mortgage early. I requested a redemption figure and was surprised to see that my latest repayment was not shown despite the fact that it had left my current account 4 days ago. My current account is also with Santander.

Direct debits are submitted way in advance and confirmation of payment can take 7-10 days after it leaves your account.

10 days for a transfer within the same bank!!!

It is a direct debit. Not a BACs payment.

katsu

We had that with Santander and just waited for the refund to come through after they processed the redemption and applied the monthly direct debit payment. It was all fairly pain free but, like you, we were surprised to see that it takes so many days for their system to recognise the regular monthly payment.

Thrugelmir

DCaraher wrote: »

However if I ask for a redemption figure the balance does not include the latest payment. I am being told it takes 10 days to allocate the payment although the online balance reflects the payment.

Even internally the bank will have a safeguard to ensure that it covers itself against a rejected direct debit or payment. Thereby leaving the bank out of pocket. Once redeemed the bank will incur considerable cost in recovering any outstanding mortgage debt. A few days is therefore inconsequential.