Santander – The new kid on the block

by Mark Johnston

Back in January 2010 Abbey National or ‘The Abbey’ as some had come to know it changed its name along with the Bradford & Bingley to Santander. This was as a result of both building societies becoming part of the largest Spanish banking group.

Although a ‘new kid on the block’ in the United Kingdom, Scamander’s banking history stretches back over 150 years. The group has over 13,500 branches which is more than any international bank and has over 90 million customers worldwide.

As the winner of Your Money Best Direct Lender Award for the second year running, Santander has some great mortgage offers at the moment.

The aptly named ‘Hat-trick’ is a 3 year tracker mortgage at 2.5% above base.  With the current Bank of England base rate at 0.5% this works out at 3% variable. After three years the rate changes to their Standard Variable Rate (SVR) of 4.24%. The maximum loan to value (LTV) is 75% with a booking fee of £333 giving it an overall cost for comparison of 4%.

Borrowers wanting to buy a property worth £100,000 would have to find a deposit of at least £25,000 with a 75% LRV. A loan for the remaining £75,000 over 25 years would currently cost £355.66. This would increase after the 3 year fixed term when the mortgage goes to Santander’s standard variable rate.

For existing customers, Santander has is offering and exclusive offer. To qualify you must be a current account customers who has held their account for at least 6months and longer and credit the account with at least £1000. For those customers, the bank is offering a 2 year mortgage that tracks 1.89% above the Bank of England base rate  (currently 0.5%) this works out as 2.39%. After two years the rate changes to their standard variable rate which is currently 4.24%. The maximum loan to value (LTV) is 70% with a booking fee of £495 giving it an overall cost for comparison of 4%.

To illustrate this borrowers wanting to buy a property worth £100,000 would be looking at least a £30,000 deposit as the LRV is 70% which is not as good as the 3 year ‘Hat-Trick’ deal. The cost of the remaining £70,000 would be £310.17 for a 25 year mortgage but don’t forget that this increases after 2 years, when the loan changes to the SVR of 4.24%

Santander is quickly establishing itself on the British high street and its no wonder when you look at the great deals that its offering its customers. Santander current offers a wide range of mortgages which include buy to let, remortgaging or additional borrowing for homeowners. Its not suprising that they even offer mortgages for property in their home country of Spain.

Borrowers need to find a deposit of at least £25,000 with a 75% LRV. A loan for the remaining £75,000 over 25 years would currently cost £355.66. This would increase after the 3 year fixed term when the mortgage goes to Santander’s standard variable rate. Whatever you are looking for, Santander may seem the new kid to us in the UK but their success worldwide speaks for itself.



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