Santander introduces a follow-on rate, and Newcastle launches a mortgage for the self-employed
From the 23rd January onwards, Santander mortgage customers will automatically be moved to a new follow-on rate at the end of their fixed or tracker rate period unless they choose a new product.
Previously, customers were automatically moved to Santander's SVR at the end of their product term, which is currently 4.74%.
Santander’s new follow-on rate is a variable rate that tracks at 3.25% above the Bank of England Base Rate, giving a current rate of 3.75%. The differential of 3.25% is guaranteed for as long as customers remain on the product. The rate payable will track all changes in base rate, either upwards or downwards.
Citizens Advice recently urged the FCA to make all lenders provide clear information to new and existing customers about how much they could lose by rolling on to a standard variable rate.
Its research found that customers who are rolled on to their bank’s standard variable interest rate at the end of a fixed term mortgage deal face an average penalty of £439 a year.
Meanwhile, Newcastle Intermediaries has launched a self-employed two-year fixed rate at 2.20%. The loan is available up to 60% LTV, has no reservation or completion fees and has a free standard valuation. It allows increased overpayment facilities of 10% of the balance per year.
For those self-employed for fewer than two years, Newcastle will assess cases individually. The firm will do this by requesting one year’s accounts, an SA3012 form or a completed accountant’s certificate.
Newcastle Intermediaries head of mortgage distribution Steve Carruthers said: “We appreciate that one size doesn’t fit all and it can be difficult to find a lender that truly understands the needs of self-employed clients, especially in the early stages of their self-employment.”
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