What to do if you’re on a Santander standard variable rate after the mortgage lender signals rate increases. May be it’s time to remortgage.
If you are an existing Santander or Abbey mortgage holder and are currently on a standard variable rate you will not be pleased to hear that from 3 October 2012 your mortgage rate will be going up.
The lender’s current SVR rate is 4.24% and it’s going to be increasing this October to 4.75% which is a considerable hike for under pressure borrowers. This move is despite the fact the Bank of England continues to show no sign of adjusting their Base Rate.
My own opinion is that Santander is making a big strategic move and although pressures from the European Internet banking market are being put on UK lenders with increased borrowing costs I also believe that Santander is playing a long-term game to make money out of its existing customers. And, yes it will loose some savvy customers to remortgages but most will probably stick it out and others will of course not have any choice but to stay with them due to changes in their circumstances.
During the last few years Santander has been probably the most aggressive lender in terms of acquiring new mortgage business. They have dominated the best buy tables to steal a march on their traditional rivals such as Halifax. This has come at a price which means most of the new business they have written has been at a reduced profit margin and grates as banks like to make money. So now they have you in their clasp they will look to maximize their returns and use the revenue to continue to grow by offering further competitive new business rates to acquire mass again.
So if you are one of the thousands of Santander borrowers who took out an attractive 2 or 3 year deals at sub 3% you will now have to cope with a rate of 4.45% after the 3rd of October.
So what are your options to remortgage away from Santander?
My advice is to always keep your options open and look at alternatives. We currently have a multitude of lenders who still have fantastic entry rates for client on a 2, 3 and 5 year basis so it’s worth talking to us about your remortgage options, plus, we don’t charge up front so you only pay us a fee on completion of the remortgage, so you really don’t have anything to loose.
To find out more about your remortgage options please call us on T: 020 7993 2044 or alternatively complete the simple enquiry form on the top right hand side of this page
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.Http iframes are not shown in https pages in many major browsers. Please read this post for details.