Homeowners being moved from interest only mortgages to repayment mortgages

The fears over a double dip recession in the UK are causing havoc for many homeowners who are finding themselves being shifted from interest only mortgages with smaller monthly repayments to capital and interest mortgages that require them to make much higher monthly repayments on their mortgages. For many this will cause serious financial problems, as it will really impact on their outgoings and ability to make repayments.

A number of lenders are said to have brought in new rules and regulations with regards to this issue, and this includes the Spanish owned Santander and the banking giant Halifax. Many borrowers who do not have enough equity in their homes and are coming to the end of an interest only special deal are being shifted onto the more costly repayment mortgage by these lenders.

The move comes following concerns that the UK could be heading for a double dip recession, and a number of industry experts have said that homeowners could lose the equivalent of the average salary from the value of their homes, which will see equity levels plunge further for many homeowners. Santander has revealed that anyone that has less than 25 percent equity in their homes will be moved from their interest only mortgage onto a repayment one.

One mortgage expert said: “For home owners with interest-only mortgages, a forced switch onto a repayment deal by their lender at the end of their fixed or discounted period would lead to a significant rise in their monthly payments. For those saddled with big mortgages, it may well be an unaffordable increase, making it difficult for them to make ends meet. Lenders are worried about a further downturn in prices and are introducing these changes to protect themselves, as well as borrowers. But hard-pressed homeowners may find it’s an extra cost too far.”

Tags: Mortgage loan, santander, mortgage, fears, Many borrowers

Apologies from Santander over poor service

An apology has been made by the Spanish owned bank Santander over the poor level of service it has given to hundreds of thousands of customers. The service problems have resulted in a range of problems, including delays with savings accounts being opened, problems with access to online accounts, and failure of bank staff to carry out transactions.

Steve Williams, director of service quality and complaints, made the apology last week, and the apology came after an investigation was carried out by the Financial Mail into chaos with administration at the bank. The bank, which took over a number of UK financial institutions such as Abbey and the Alliance & Leicester, has been accused of a number of failings following the investigation.

According to reports the bank has put all of its efforts into ensuring that the level of service is extremely high for its current accounts. However, in doing this it stands accused of letting customer service levels falls in other areas. In the first half of this year the bank received almost a quarter of a million complaints, the majority of which were in relation to its customer service levels, and this is what sparked the investigation.

Mr Williams admitted the bank’s failings when he made the apology, and he said that the bank was a growing one and that it understood that there were areas that needed to be addressed with regards to its service levels and other areas. This will partly be done through increased staffing.

Williams said: ‘We are creating more than 600 new jobs in our British branches and call centres. These roles will support our business and growth while enabling us to continue improving our service to customers.’

Tags: Mail, santander, alliance & leicester, bank, Santander UK, complaints, finance

Santander to take over High Street banking names

It has been revealed that a number of well known financial names will disappear from the High Streets in the UK from next year, when they are rebranded in the name of the Spanish financial institution that owns them. Read more

Tags: santander, individual brands, abbey, spanish bank santander, rebranded, bradford & bingley