Santander To Raise Svr?

[19 year mortgage 8itch]

Breaking on twitter...

[thecrashingisles]

Tanya Powley ‏@TanyaPowley

Santander to increase its SVR by 0.5 percentage points to 4.74% from 3 October. Has written to affected customers this week.

Tanya Powley ‏@TanyaPowley

Santander is also increasing its SVR Cap Margin - the max amount above BoE base rate that it can charge - from 3.75 to 4.99% from 24 Sept

Edited August 22, 2012 by thecrashingisles

[19 year mortgage 8itch]

[TheCountOfNowhere]

I shouldn't do this but.....

[Guest_James Toney_*]

I shouldn't do this but.....

me toooooooooooooo

[Bland Unsight]

It's on their website.

Wow.

[rantnrave]

Please let it lead to others doing the same, pretty please...

Anyone keeping an eye on MSE and Mumsnet for the response?

The banks must play (un)lucky dip to choose who is going to be first to up the SVRs each time.

[moonriver]

http://www.mortgagestrategy.co.uk/latest-news/santander-svr-to-rise-05-in-october/1056664.article

Santander SVR to rise 0.5% in October

Santander has written to customers informing them that its Standard Variable Rate will increase from 4.24 per cent to 4.74 per cent from October 3.

The lender is also informing customers that the SVR Cap Margin – the maximum amount above the Bank of England base rate that it can charge – will rise from 3.75 per cent to 4.99 per cent from September 24.

A spokeswoman for Santander says: “This move is prompted by several factors - most notably the fact that for the last three years the amount it costs us to provide mortgages and the rates we offer our savings customers have been increasing despite the base rate remaining static. Indeed, for some time the correlation between base rate and mortgage and savings rates has been weakening. Additionally, the cost of running a bank in the UK has increased dramatically through a combination of increased liquidity, capital and funding requirements.

“Our analysis shows that our SVR mortgage holders will see an average increase of £26 per month for a £100,000 mortgage. We will consider all particular customer circumstances that might lead to financial difficulties as a result of this change. We will work with our customers on an individual basis and we have developed a programme to help them manage any impacts - consisting of payment holidays, waiving charges or even resetting mortgages as appropriate.”.....

A new upward trend again?

And so soon after we had been told rates were going down.

Can't resist either....

[thecrashingisles]

The Cap is worked out by adding a set amount (known as the Margin) to the Bank of England official bank rate. On 24th September 2012 we will increase the Margin from 3.75% to 4.99%. The Cap will therefore be 5.49% (based on the current bank of England official bank rate of 0.5%). This means that our SVR will not go above 5.49% as long as the Bank of England official bank rate remains at 0.5%.

That promise is obviously meaningless as they've just demonstrated that they can change the cap without much notice.

In a month of bearish news, this is possibly the most significant if it starts a trend.

[19 year mortgage 8itch]

Don't laugh too soon, waiting for FFL and Plan A+ to show its face.

[moonriver]

Anyone keeping an eye on MSE and Mumsnet for the response?

Good idea.

I wonder how many customers will of received these letters?

Anyone know how big a market share Santander has in the mortgage market?

And how many are likely to be on their SVR?

If it is not that many, I am guessing this could affect many more in the future when they come off fixed rates and are unable to move elsewhere, due to the value of their property going down.

[The Knimbies who say No]

Tanya Powley ‏@TanyaPowley

Santander to increase its SVR by 0.5 percentage points to 4.74% from 3 October. Has written to affected customers this week.

Tanya Powley ‏@TanyaPowley

Santander is also increasing its SVR Cap Margin - the max amount above BoE base rate that it can charge - from 3.75 to 4.99% from 24 Sept

so 50 basis points up, and giving themselves the headroom for another 0.75% at current BoE rates.

Now, what's to stop Nationwide, who I think 'Chairman of the Bored' has pointed out previously are taking a bit hit on their SVR, now having the cover to do likewise?

Nevertheless, a big industry player bumping up rates and rewriting the rules to do more of the same with impunity in future will surely be the stuff of nightmares for sentiment.

[long time lurking]

[singlemalt]

Nice.

[The Masked Tulip]

Santander have apparently been a major lender in Swansea. Having looked at a house yesterday on for 385K asking which last sold in November 2006 for 180K I hope the owners are with Santander

[SHERWICK]

so 50 basis points up, and giving themselves the headroom for another 0.75% at current BoE rates.

Now, what's to stop Nationwide, who I think 'Chairman of the Bored' has pointed out previously are taking a bit hit on their SVR, now having the cover to do likewise?

Nevertheless, a big industry player bumping up rates and rewriting the rules to do more of the same with impunity in future will surely be the stuff of nightmares for sentiment.

Yes, from their website:

"The Cap is worked out by adding a set amount (known as the Margin) to the Bank of England official bank rate. On 24th September 2012 we will increase the Margin from 3.75% to 4.99%. The Cap will therefore be 5.49% (based on the current bank of England official bank rate of 0.5%). This means that our SVR will not go above 5.49% as long as the Bank of England official bank rate remains at 0.5%."

So they now can (and will?) increase their SVR to 5.49% (from the now current 4.74%) even if the BoE rate stays at 0.5%?

[Bland Unsight]

Anyone know how big a market share Santander has in the mortgage market?

About 20% of the market according to CML figures for 2011.

[interestrateripoff]

so 50 basis points up, and giving themselves the headroom for another 0.75% at current BoE rates.

Now, what's to stop Nationwide, who I think 'Chairman of the Bored' has pointed out previously are taking a bit hit on their SVR, now having the cover to do likewise?

Nevertheless, a big industry player bumping up rates and rewriting the rules to do more of the same with impunity in future will surely be the stuff of nightmares for sentiment.

Isn't the Nationwide problem the BMR which is 2% plus base rate? I think Nationwide has a hard sell on trying to get those with this onto a new deal and off this rate if they have sufficient equity.

I'm guessing for the Nationwide the waters are further complicated as the BMR benefits will have been used to sign people up to mortgage deals and they are probably more open to legal challenges if they change the rate.

[Guest_James Toney_*]

love to see the BOE raise their IR too, this would really get things going,

[thecrashingisles]

One other reason why this is significant is that they've obviously done modelling on how many of their borrowers will be pushed over the edge by rate increases and still decided that they are better off raising the the rates. It could signal that they will start to get tougher on forbearance.

[19 year mortgage 8itch]

Isn't this the same Santander who promised free business banking for life?

Then inserted clauses in the small print to say they could renege on the promise at any time?

and have done...

They're going to get themselves a bad reputation at this rate.

Its a good job they have such an impeccable customer service record...

[The Masked Tulip]

love to see the BOE raise their IR too, this would really get things going,

Can't screw both savers and borrowers then

[moonriver]

About 20% of the market according to CML figures for 2011.

Thanks for the interesting link.

Very relevant news then, as they are showing as being the 2nd largest lender.

[The Knimbies who say No]

Isn't the Nationwide problem the BMR which is 2% plus base rate? I think Nationwide has a hard sell on trying to get those with this onto a new deal and off this rate if they have sufficient equity.

I'm guessing for the Nationwide the waters are further complicated as the BMR benefits will have been used to sign people up to mortgage deals and they are probably more open to legal challenges if they change the rate.

Your memory is better than mine, IRRO. Happy to be corrected.

[Guest_James Toney_*]

Can't screw both savers and borrowers then

yeah very true MT never thought of it like that,