Unable to make mortgage overpayments until new deal begins

JDP84

We have just locked in a new 5-year fix on our Santander mortgage to begin in February 2024.

Ahead of then, we had planned on continuing to make monthly overpayments (within 10% limit) to try and soften the blow of the increase a bit when it comes round. However, Santander has said that as we have accepted the new rate, we cannot make any further overpayments between now and next February. 

Was surprised by this - effectively switching off a key provision of our existing agreement for the next five months - particularly in the current climate and generally from a Consumer Duty / PRIN12 perspective. Wondered if this was standard practice among lenders? 

(I know that we could put the overpayments into a decent savings account and do a lump sum overpayment in February - so it’s not exactly fatal / a nice problem to have). 

dunstonh

Ahead of then, we had planned on continuing to make monthly overpayments (within 10% limit) to try and soften the blow of the increase a bit when it comes round. However, Santander has said that as we have accepted the new rate, we cannot make any further overpayments between now and next February. 

If you already had a regular overpayment set up, then that will continue. It is just ad-hoc overpayments or new overpayments that they dont like.   (I know this as I am doing a monthly overpayment and that is fine.  Indeed, I upped mine just before accepting the new deal to ensure it would be in place)

We have just locked in a new 5-year fix on our Santander mortgage to begin in February 2024.

Keep an eye on the deals as Santander just lowered theirs again.  you can get your broker to reinput the deal right upto 14 days before the date.   I have already had my Santander deal changed once and I only agreed the first deal a week ago.

ACG

Im not sure if consumer duty would be applicable. Your existing deal has been in place for 5 years nearly, consumer duty only kicked in this month and thats only for new sales not existing products (that starts next year). 

You could argue that by allowing you to secure a new deal 6 months in advance is adhering to consumer duty. You could also argue that not allowing overpayments once a new deal is set up, is not sticking to their mortgage contract unless it states somewhere in your paperwork or T&Cs that it cant be done. 

However, you also have to look at realistically how much time and energy are you going to use getting into an argument compared to how much you are losing in interest. 

It seems its just a system limitation and maybe in place to avoid mix ups down the line - historically product transfers were only available 3 months in advance. 

If any event if they do not allow it/cant do it, you can kick up a fuss and maybe get £50-100 compensation but you might also end up spending weeks going back and forth for the pleasure.