View more on these topics

Santander SVR move ‘pulls rug from under borrowers’

Santander-700x450.jpg

Brokers and MPs say the fact Santander UK is having to contact more than 270,000 mortgage customers after it failed to clearly explain an increase in its standard variable rate cap shows borrowers are having “the rug pulled from under them”.

Santander says 30,000 borrowers could be paid redress after it increased its SVR cap in December 2008, from 2.5 per cent plus Bank of England base rate to 3.75 per cent plus base. 

Santander is inviting borrowers to complain after the Financial Conduct Authority found the lender failed to explain to borrowers they had a three-month window to repay their mortgage or move to another lender without incurring an early repayment charge. In some cases it failed to write to borrowers at all.

The bank upped its SVR cap again in October to 4.99 per cent plus base, and raised the SVR from 4.24 to 4.74 per cent.

John Charcol senior technical manager Ray Boulger believes the number of affected borrowers could be higher than 30,000.

He says: “What is the point of having an SVR cap when it can be changed relatively easily by the lender? It seems to raise a bigger question about whether caps are genuine, as at the very time when the cap is worth anything to the consumer the rug is pulled from under them.”

Labour MP and Treasury select committee member George Mudie says: “It is unfortunate banks are seeking to repair their balance sheets at the expense of mortgagees.”

Santander has set aside £232m to deal with “customer conduct issues”, partly to cover SVR redress. Halifax carried out a similar review in February 2011

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Dear old Ray Boulger !

    You only just worked out what Santander are doing to their existing borrowers ? You should have a look at what’s on offer when they come to the end of a deal !

    This is an appalling lender getting away with anything and everything and the MMR TCF and all the other ‘price gouging rules’ being breached are just conveniently overlooked by them and much more importantly the regulator.

  2. Totrally agree with Ray and the above comment – I didn’t even know that they had a cap (well, they didn’t really, did they?).

    Halifax did something similar and no action was taken. Rerhaps they just kept their process within the rules.

  3. In every aspect of its business – mortgage lending, current accounts, investment ‘advice’ and administrative endeavours – Santander has shown itself to be lower than a chihuahua’s belly.

    Their constant unnecessary fleecing of their customer base is one of the most disagreeable aspects of the last ten years.

    Their treatment of existing borrowers looking to arrange another fixed deal with them is redolent of usury.

  4. It was actually Abbey National that caused this issue. It was them who did not inform customers of the SVR change. When Santander took over the company, they obviously inherited their mistakes and are now paying for it, even though they are not the ones at fault.

  5. “Labour MP and Treasury select committee member George Mudie says: “It is unfortunate banks are seeking to repair their balance sheets at the expense of mortgagees.”

    Haha, when I did my exams, the mortgagee was the lender, not the borrower.

    Another reason not to vote Labour. They don’t even understand what they are supposed to oppose !

Leave a comment