Santader - Partial early repayment refund

In November 2020 I ported my Santander mortgage to a new property. I have recently received a letter stating that 'As you took your new mortgage with Santander immediately the early repayment charge (ERC) should've been reduced.' They have offered a partial refund of the ERC paid by me and 8% gross compensatory interest payment.  This has been offered as a full and final settlement.

I do not have details of that mortgage at the moment (its in storage) and have asked Santander to inform me how much ERC I paid at the time but I am wondering if anyone knows why they have offered a 'partial repayment'? 

There may be a logical reason for it being a partial repayment instead of full repayment.  

Also, why would the letter state 'full and final settlement' if they are paying what they should?

Many thanks for any help.

Comments

  • MorningcoffeeIV
    MorningcoffeeIV Posts: 1,927
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    edited 12 December 2023 at 3:00PM


    There may be a logical reason for it being a partial repayment instead of full repayment.  

    Also, why would the letter state 'full and final settlement' if they are paying what they should?



    The logical reason is in the letter they sent you.  The ERC should've been reduced - not been eliminated.

    Full and final settlement means they've paid you what they should.  That's all you're getting.  It's not up for discussion or negotiation.
  • Did you downsize your mortgage. Eg had a 300k mortgage but downsized to a smaller place and reduced the mortgage to 250k for example. So you partially redeemed the mortgage.
  • MWT
    MWT Posts: 9,141
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    Full and final settlement means they've paid you what they should.  That's all you're getting.  It's not up for discussion or negotiation.
    The partial refund is explained by the statement that the ERC should have been reduced, that bit is clear.
    However 'Full and final settlement' does not imply that they have paid 'what they should', it is an offer which if accepted brings the matter to a close and has the potential to end any further claim against them for this matter...
    It may well be that the refund and the interest as offered are an acceptable resolution, or it may be that this offer is below what could be obtained as part of a complaint.
    Always be careful when accepting offers presented in this way if you are unaware of the background and the alternatives.
    This may be something that the Ombudsman has already ruled on and that may be what has trigged the offer, perhaps someone else here will have more details.... ?



  • Hoenir
    Hoenir Posts: 1,300
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    8% is the prescribed rate of interest that a financial institution has to pay in rectifying a mistake. As laid down by the FOS. 
  • Thank you all for your replies, it seems that perhaps it was the way it was worded was misleading - I read it that it was a partial refund for an amount that shouldn't have been paid. From your replies I shouldn't have paid the full ERC and will be refunded the amount that I shouldn't have paid. 

    As @Veteransaver suggests I reduced my mortgage when I moved which would explain it.

    Once again, many thanks for taking the time to reply  <3
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