Santander is the new name for mortgage products that were previously offered by Abbey PLC and Bradford and Bingley. Santander UK PLC is part of the big Spanish bank that took control of these banks in 2004. They offer most traditional mortgage products including fixed and variable rate deals.
There are several products that are based upon the santander variable rate whether they be completely at the standard variable rate or a percentage above this for example as a tracker rate. Normally when people take out a mortgage product it's for a number of years and then it reverts back to the SVR. Because interest rates are low and it costs a fee to take out a new mortgage many people have simply let there offer deal lapse onto SVR because the rates are so low.
Not a deal as such but the interest rate is simply the base rate that Santander publish as their standard variable rate which you can't take out directly but it's the rate you end up on once your deal has expired.
This product tracks the Bank of England base rate rather than the Santander SVR at a predetermined amount in percentage terms above the base rate as published. You are allowed to overpay certain amounts on your mortgage as well as take some payment holidays (although interest will still accrue normally).
A capped rate simply means you pay a variable interest rate but it goes no higher than a certain amount if rates rise. Santander does not usually offer capped rate mortgages but it's worth looking on their site if this is what you are after.
These are very popular if you believe that rates will rise in the future or simply want to know that your monthly repayments will be fixed for a certain amount of time. Santander offer a range of fixed rate mortgages but generally these are for 2 years, 3 years or 5 years. There used to be 10 year fixed rate mortgages on offer but with lower than usual interest rates these have been withdrawn.
Most products carry an arrangement fee anywhere from £995 but you may be able to negotiate this down if you are already a Santander customer. There are generally early redemption penalties if you close your mortgage deal before the deal period has completed and this may be a percentage of your overall loan and in some cases the discounted amount as well.
The actual interest rate charged also varies by product depending on two factors:
With the risk being taken out of the market the very best deals are found where your loan to value percentage is low. Rates can vary by over 1% and the highest are where the LTV is 90% or more. If your LTV is 75% or less than you'll find the best deal from Santander and all other banks.
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