Unfortunately, this deal is no longer valid
Santander 1.89% 5 year fixed rate mortgage 75% LTV
904° Expired

Santander 1.89% 5 year fixed rate mortgage 75% LTV

53
Posted 11th May 2019

This deal is expired. Here are some options that might interest you:

Booking fee £999 (can be added to the balance of the mortgage)

Repayment charges:
Overpayments are allowed up to 10% without a charge. If you overpay beyond that limit you will be subject to an early repayment charge.
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Extra incentive for Santander customers: If you have a Santander '123' or '123 lite' current account you can get 1% cashback on the first £1k of your mortgage payment (so max £10/month).
The crazy world of mortgages....
They borrow you money and you pay them back with interest and pay them £999 on top for the privilege
53 Comments
Only bad thing with Satander is non reducing 5% erc
Ruffuz11/05/2019 17:02

Only bad thing with Satander is non reducing 5% erc


Same with most lenders on this type
Of deal
What does erc mean?
Early repayment charge?
There are also a few with no product fee but lower LTV..
Are you charged the 5% charge only if over 10% then?
dealmania11/05/2019 17:33

Are you charged the 5% charge only if over 10% then?


Yes, but most lenders reduce charge as time goes on.
With Santander is 5% through life of your fix.
dealmania
i believe your question is in regards to the 5% ERC{ Early Redemption Charge}.
what it means is. if you took the the mortgage today and for any reason you have to pay it back before the 5 years is due. you will pay the bank a penalty of 5% till the very last second of the 5 year due date. eg if you took it today 11/5/2019. .your redemption date will be 10/5/2024. any second before that 5% will be charged.
dealmania11/05/2019 17:33

Are you charged the 5% charge only if over 10% then?



You get a 10% allowance for overpayments each calendar year, you can pay more than this but any more that you pay is subject to a 5% Early Repayment Charge

bampoea11/05/2019 18:19

dealmaniai believe your question is in regards to the 5% ERC{ Early …dealmaniai believe your question is in regards to the 5% ERC{ Early Redemption Charge}.what it means is. if you took the the mortgage today and for any reason you have to pay it back before the 5 years is due. you will pay the bank a penalty of 5% till the very last second of the 5 year due date. eg if you took it today 11/5/2019. .your redemption date will be 10/5/2024. any second before that 5% will be charged.



The end date for this fix is 2 August 2024, so even if you took the rate today you would be tied in until this date. If you wanted to repay the balance in full, or anything over your annual allowance before this date, you would be charged a 5% fee.
Extra incentive for Santander customers: If you have a Santander '123' or '123 lite' current account you can get 1% cashback on the first £1k of your mortgage payment (so max £10/month).
bampoea11/05/2019 18:19

dealmaniai believe your question is in regards to the 5% ERC{ Early …dealmaniai believe your question is in regards to the 5% ERC{ Early Redemption Charge}.what it means is. if you took the the mortgage today and for any reason you have to pay it back before the 5 years is due. you will pay the bank a penalty of 5% till the very last second of the 5 year due date. eg if you took it today 11/5/2019. .your redemption date will be 10/5/2024. any second before that 5% will be charged.


So pay the max 10%, save your extra money and pay it one second after the fix ends, and on top of that you might find a couple of accounts to give you 3%+ on the money you wanted to use to pay off the mortgage
BeefyMcWhatNow11/05/2019 19:32

So pay the max 10%, save your extra money and pay it one second after the …So pay the max 10%, save your extra money and pay it one second after the fix ends, and on top of that you might find a couple of accounts to give you 3%+ on the money you wanted to use to pay off the mortgage


But the real issue is if you NEED to early repay, ie if you HAVE to sell your house, eg divorce, relocate. You can usually port these though to a new property if you have to move but it isn't always that straightforward.
But obviously it's unlikely that rates will fall further so you aren't likely to want to move to a cheaper mortgage provider, so other than the above scenarios it isn't likely you'll wish to repay early.
5% of a £200,000 mortgage.......

.... £10,000..........ouch.......
Thank you all for the extra bits of very useful information added
Booking fees make it a bad deal for those with smaller mortgages. Good for those with hefty mortgages.
Don't seem to be able to get this offer on remortgage.... Poo
trannyboy11/05/2019 22:59

5% of a £200,000 mortgage........... £10,000..........ouch.......


The way I look at it is if I won lottery and would want to repay early I wouldn't really care much about the 10%
The crazy world of mortgages....
They borrow you money and you pay them back with interest and pay them £999 on top for the privilege
prash_2k11/05/2019 17:26

Same with most lenders on this typeOf deal


Apart from hsbc and first direct ( i know they are the same bank)
zochus1512/05/2019 14:43

The way I look at it is if I won lottery and would want to repay early I …The way I look at it is if I won lottery and would want to repay early I wouldn't really care much about the 10%


Wife left you and you had to sell up
Does Santander still charge interest on a yearly rate, or daily like decent banks, the abbey used to always set the interest payable on the amount each year
Not sure if helpful for anyone but I just got 1.84 with Halifax via l and c mortgages same LTV. No fee Halifax paying solicitors fee however only fixed for 2 years. I realize it's not the same, actually should I post that as a deal?
whatyadoinsucka12/05/2019 15:22

Does Santander still charge interest on a yearly rate, or daily like …Does Santander still charge interest on a yearly rate, or daily like decent banks, the abbey used to always set the interest payable on the amount each year


From memory banks haven't been allowed to do annual interest for years. Most do either Daily-Monthly (Interest is calculated on the daily balance and added monthly, like a savings account) or Daily-Daily (Interest is calculated and added on daily, which is unfair I feel)
Edited by: "Skuldo" 12th May 2019
Skuldo12/05/2019 16:01

From memory banks haven't been allowed to do annual interest for years. …From memory banks haven't been allowed to do annual interest for years. Most do either Daily-Monthly (Interest is calculated on the daily balance and added monthly, like a savings account) or Daily-Daily (Interest is calculated and added on daily, which is unfair I feel)


Cheers I wasn’t sure I had a quick google and couldnt see anything I know my HSBC clearly states interest calculated daily and I recall a mortgage advisor telling me abbey national would charge yearly so any overpayments during the year didn’t lower interest chargeable in that year until the next interest calc
When you repay (up to ten percent per year) you have the option of reducing the term or reducing the monthly payment. This maybe wrong, but my view is that the ERC really doesnt comes into it, as a 1.89% across 5 years is pretty cheap, and I doubt you will want to move earlier than that.
If you are lucky enough to do a massive lump repayment then worry about that if or when it happens.
Cheapest five year fix I could find without fee was 2.09% with Nationwide - but it's 65% LTV.

Adding the £999 fee to the OP product at 1.89%, I'm working out that you need a five year mortgage of over £138,500 in order to make it worthwhile paying a fee for a saving of 0.20%.

Just for info - if your mortgage is less than £138,500, you'd be better off not paying a fee (unless doing an interest only mortgage).
Anyone fancying Nationwide rather than Santander, they also do a 5 year fix at 1.89% with £999 fee, but it's 65% LTV.

I'm not plugging Nationwide btw, I've just looked into their rates recently for my own purposes.
On the subject of ERC - I always thought that the 10% amount you could pay each year would reduce too with the outstanding amount. So a £200,000 mortgage attracts up to £20,000 repayment possible in the first year. minus the overpayment and normal payments on an outstanding balance of £175,000 you would then only be able repay £17,500 under the 10% rule in the second year.
But I was told that the 10% amount is worked out off the original borrowed amount, and applies per year.
So on a £200,000 mortgage, you could actually make 5 x £20,000 overpayments with no ERC in each of the five years
Obviously not for everyone, but hopes this helps those fortunate to make overpayments.

I've been very fortunate to be able to overpay around 13% of my current outstanding amount in my 4th year with no ERC, as it's only 8% according to the original amount of the mortgage - if that makes sense. I did check first, and now had a letter confirming this overpayment with no ERC.
trannyboy11/05/2019 22:59

5% of a £200,000 mortgage........... £10,000..........ouch.......


Not to be a pedant, but you'd make a £20,000 overpayment with no fee.
Then £180,000 at 5% ERC, which is £9000.
Still ouch though.
lanc197912/05/2019 17:36

On the subject of ERC - I always thought that the 10% amount you could pay …On the subject of ERC - I always thought that the 10% amount you could pay each year would reduce too with the outstanding amount. So a £200,000 mortgage attracts up to £20,000 repayment possible in the first year. minus the overpayment and normal payments on an outstanding balance of £175,000 you would then only be able repay £17,500 under the 10% rule in the second year.But I was told that the 10% amount is worked out off the original borrowed amount, and applies per year.So on a £200,000 mortgage, you could actually make 5 x £20,000 overpayments with no ERC in each of the five yearsObviously not for everyone, but hopes this helps those fortunate to make overpayments.I've been very fortunate to be able to overpay around 13% of my current outstanding amount in my 4th year with no ERC, as it's only 8% according to the original amount of the mortgage - if that makes sense. I did check first, and now had a letter confirming this overpayment with no ERC.


The 10% overpayment depends on your t&C's some are 10% of the original amount borrowed (N&P for example*) others it's 10% of the balance after each mortgage anniversary (YBS) and even then the erc terms for offset are even more complicated... Definitely pays to do your research before signing or at least knowing where you stand with overpayments.

*Or £10,000 which ever was the lower amount
I guess many people in the SW of England have never witness being 'underwater' - i.e. owing more than the property is worth at which point the back requires extra collateral to cover the difference or paying back the loan in full immediately.
Given the likely turbulence ahead, depending on where you are buying, get a loan at the peak on something that might become deprecating asset is a bit of a gamble.
It still is a very good offer, I am just wondering why these are becoming more and more attractive in % terms....
I am with Santander and my fix is coming to an end. When I used their online option to remortgage, I got two 5 Yr options. One is the deal described here. Second was 1.99% fixed for 5 years with no fees. This deal was cheaper for me when I looked at total payments over the 5yr period. Hope this might be of benefit. Cheers.
Ruffuz11/05/2019 17:02

Only bad thing with Satander is non reducing 5% erc


Only bad thing is santander. Awful bank with terrible customer service
gingertips12/05/2019 21:16

Only bad thing is santander. Awful bank with terrible customer service


I had no issues with them, banking and mortgage.
Worst customer service
Psychobunni11/05/2019 18:43

You get a 10% allowance for overpayments each calendar year, you can pay …You get a 10% allowance for overpayments each calendar year, you can pay more than this but any more that you pay is subject to a 5% Early Repayment ChargeThe end date for this fix is 2 August 2024, so even if you took the rate today you would be tied in until this date. If you wanted to repay the balance in full, or anything over your annual allowance before this date, you would be charged a 5% fee.


In general, when you choose to your 10% early repayment most providers give. Is that on the whole mortgage (10%of the whole debt) or just an extra 10% on your mortgage payment. ie for example say you owe 100,000 (1 year rate) and your mortgage payment is 500 per month.

Can you overpay £10,000 a year or is it £600 per year without the excess charge.
Sorry for the random question, never got my head around this.
Edited by: "brush1" 12th May 2019
lanc197912/05/2019 17:18

Cheapest five year fix I could find without fee was 2.09% with Nationwide …Cheapest five year fix I could find without fee was 2.09% with Nationwide - but it's 65% LTV.Adding the £999 fee to the OP product at 1.89%, I'm working out that you need a five year mortgage of over £138,500 in order to make it worthwhile paying a fee for a saving of 0.20%.Just for info - if your mortgage is less than £138,500, you'd be better off not paying a fee (unless doing an interest only mortgage).


You can get 2.09% with no fee, fixed for 5 years on 25/75% LTV from Santander (I know as I was going to get it a few days ago but plumped for 1.89% instead as it worked out better, and as for the £999 fee I'll just add it to the loan, defer it and pay it off within the first 21 days and avoid any interest on it).
The 1% interest for existing Santander 123 / Lite customers also swung it over other deals - it is available for both the standard 123 account (£5pm monthly fee, cashback, 1.5% interest on 123 current account balances up to £20K) and the 123 Lite account (£1pm monthly fee, cashback, 0% interest on account balance). Just pop on Santander's online tool and input your details; if it *appears* to only return the 1.89% deal, look for a button below it to show all deals and you'll see the 2.09% one plus other deals for various terms, LTV ratios and rates etc.
brush112/05/2019 22:00

In general, when you choose to your 10% early repayment most providers …In general, when you choose to your 10% early repayment most providers give. Is that on the whole mortgage (10%of the whole debt) or just an extra 10% on your mortgage payment. ie for example say you owe 100,000 (1 year rate) and your mortgage payment is 500 per month. Can you overpay £10,000 a year or is it £600 per year without the excess charge.Sorry for the random question, never got my head around this.


The 10% is of the amount owed not 10% of your monthly payment, but as said earlier you need to check the T&C's of your mortgage, your provider can tell you as well and should explain it in plain English (eg what amounts for your situation) (get it in an email/letter so you can refer to it in the future as well)
A mortgage is like a noose round your neck for a many years.

A good mortgage deal means the noose is made from leather rather than say...barbed wire.
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