Two Mortgage Products (due to porting) - Santander.

calmity72

Hi, I wonder if you would be able to provide some advice or guidance.
We moved home and ported our mortgage to Santander and borrowed more for a bigger home. We therefore have two mortgage products. According to our mortgage details it is split in the following ways ,with the following early repayment charges:

• Loan 1, £120k, ends July 2021, Early Repayment Charge - £3595
• Loan 2, £65, ends November 2021, Early Repayment Charge - £3214

What I am looking to understand is, can I leave Santander before November this year or will I have to wait until after November to move to a new Lender? Therefore paying the standard rate for Loan 1 for four months?

Santander are offering us the opportunity to align and remortgage for the full amount with them. However, on reviewing, I think there are much better deals available that would reduce our overall term by a couple of years still paying the same total mortgage payment.

What I am looking to understand is, can I leave Santander before November this year or will I have to wait until after November to move to a new Lender? Do I need to understand the exact date for transfer or do lenders have a degree of flexibility, as long as its near the near the end of the agreed fixed period?

Thanks in advance for your help

Chris

getmore4less

Nov or ERC payable if you move.


What are they offering

What do you think you can get that is better

What LTV do you have?
What term do you want?  (fixed and full)
What payment do you want to make?
(payment changes the saving on deals important if planning to overpay.)

Any potential issues with a new lender.  income OK no defaults etc?

Can't see customised product transfers but the regular rate are quite competitive for decent LTV

kingstreet

You need to see out all periods where an ERC applies, or pay the ERC which is due.

Thrugelmir

calmity72 said:

 Do I need to understand the exact date for transfer or do lenders have a degree of flexibility, as long as its near the near the end of the agreed fixed period?

No flexibility if you intend moving to a new lender. Why should there be. You were aware of the contractual terms when you opted for the products. 

calmity72

Thanks @getmore4less and @Kingstreet, your comments are are helpful.
getmore4less you questions made me look deeper into my situation; but in summary:

• What LTV do you have? 75%
• What term do you want?  (fixed and full) 5 Years / 23 Years
• What payment do you want to make? Repayment and want to over pay less than 10% each year.
• Also, we are both really lucky to be have steady and secure employment during these crazy times and no credit problems.

When we did a price comparison we had a £860 santander payment vs a £790 - £820 payment with other lenders. But the Illustration from santander doesnt tell me my total borrowing and what I think they are doing is adding my early redemption charge (adding to my borrowing)  from the second part of my loan. Even by adding this early redemption payment its reduced my current monthly payment - personally I think that is really naughty of Santander not to be explicit that they are adding the ERC and/or showing the total amount being borrowed. So, thank you for asking me these questions because it is now clear, I need to wait to November. 

getmore4less

Payments don't tell you what you need to know.

Need the rate, fees, amounts and terms(to the month) for illustrations in case they are different.
Santander will probably be working with your current schedules but you are probably comparing to full years even a month can make a difference

What rates are Santander offering.
What rates are you using from other lenders

calmity72

Thanks @getmore4less
In terms of your questions;
What rates are Santander offering. 1.54 (happy with this offer); £1499 fee. Quote £856pm not adding fees, £863pm adding fees.
What rates are you using from other lenders. 1.54 with £999 fee; quote via moneyfacts (First Direct) , quote £792pm not adding fees. £490 product fee.
So basically same interest rate but a difference of £64 per month. £3800 of a difference over the 5 years?
Convinced its to be with the ERC but can't be certain.
We need to borrow £184K for a £252 house value, over 23 years.

getmore4less

ERC on that £65k looks like 5% 
going with £184k  5y fix 23y term 
Starting with Santander 1.54% £1499 fee.  both those payment(£856, £863) look wrong
looking at the Nov ERC(£3,200) and the £1,499 fee combinations

option	rate	fees	payment	add fees
1	1.54%	£0.00	£792.11	£792.11
2	1.54%	£1,499.00	£792.11	£798.57
3	1.54%	£3,200.00	£792.11	£805.89
4	1.54%	£4,699.00	£792.11	£812.34

if we add the other ERC(£3.600)

option	rate	fees	payment	add fees
1	1.54%	£0.00	£792.11	£792.11
2	1.54%	£1,499.00	£792.11	£798.57
3	1.54%	£6,800.00	£792.11	£821.39
4	1.54%	£8,299.00	£792.11	£827.84

If we drop the term to 21 years 

rate	fees	payment	add fees
1.54%	£0.00	£855.04	£855.04
1.54%	£1,499.00	£855.04	£862.01

My best guess is they used 21 years for the full term.
You need to go back to Santander and find out what they are really offering.
if they have done that and will let you switch with no ERC then that may be a decent deal even with the £1,499 fee because you can switch now. 

The FD number(£792) is ok for £184k, 23 years, 1.54%  

You don't say what rates you are currently on to work out the numbers.
Also ask if they have a no fee option for a product switch(if better than 1.73% no fee is better for £184k over 23 years on a 5y fix

As rough guide the SVR is 3.35% so to wait for 4 months for £120k would cost  roughly £725 + whatever cost there is on the £65k at the old rate
 
The difference in fees(£1,499-£490)  is ~£1.1k  so most of that is covered if you switch now and  there will likely be more costs switch in lender(exit fees, maybe valuation/solicitor...). and you have to wait to avoid ERC.

until we know where the Santander numbers come from it is guess work to do further comparisons.

The rate is good the fee a bit steep,  your ERC on the Nov part really gives other options a hill to climb to recover that even if they have lower fees.

Just to throw another option on the table, at 75% LTV the sweet spot currently seems to be Barclays  and their 7year fix at 1.49% with £749/£999k fee there are eligibility requirements and it may not be around in Nov,  with barclays you can do a track and switch but that costs another £1k. 

helrav72

we currently have a mortgage with Santander which we have had for 6yrs, we got in touch a few months ago regarding porting our current mortgage over which they said would be fine, so we sold our property and found a new one only to be told that because I'm self employed they wouldn't give us a mortgage even though we currently have one with them and didn't want to borrow anymore money just the same amount, so we are now in a position where we have go pay an early exit fee so that we can get our new house, but this is through no fault of our own as we wanted to stay with them, also wouldn't  stay with them if they payed the mortgage for me, we have been treated awfully!

calmity72

@getmore for less - thanks for all that hard work. I will call them and confirm.  I can see what you are saying.. and the calculation for the 4 months SVR is super helpful - it really helps me make an informed decision. But let me get back to you on exactly what the Santander are offering...
Cheers ;0)

calmity72

@helrav72 I haven't been impressed with them either. Sorry that has happened to you and hopefully it all gets resolved.