Thousands Santander mortgages will experience an increase in their repayments as the variable rate change takes effect. It has risen from 4.24% to 4.74%.
Santander has jumped on the bandwagon of the banks that have increased their variable rates; the best time to do this is when everyone else is doing the same thing but is it right and moral?
So a customer with a mortgage of 100,000 will see their monthly payments increase by 26 per month so over 25 years that equates to 7,800 not a bad bit of business for the bank. The bank gave the usual excuse that it was due to the cost of funding.
If the banks get the money to lend from customer deposits then this is a hard one to understand as most banks are paying virtually nothing on savings accounts and I expect Santander won't be paying their deposit customers an extra 0.5% in credit interest.
My advice to anyone on a Santander variable rate mortgage is to talk to a whole of market mortgage broker who can check out all the deals from across the market and as long as you have equity in your property, have a provable income and also have a clean credit history then you should be able to save a significant amount of money. If you unfortunately don't meet these criteria then unfortunately the bank have you trapped and they will be pocketing this extra profit.
Having said this right now there are some fantastic mortgage rates around and I would go so far as to say some of the best rates we have ever had so it is important that customers make the call and see if there is a way they can exit from these expensive and rising variable rates.
It is good news that the value of homes has risen for the second 3 months of the year this coupled with people over paying their mortgages all looks well for the future. One day this credit crunch and recession will be over and there will be winners and losers. The real winners I feel are those that took advantage of the low interest rates, over paid their mortgage or even paid what they paid when the rates were higher because this will knock years off their mortgage and ultimately help with their retirement as there are a lot of challenges with pensions.
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