From the 23rd January onwards, Santander mortgage customers will automatically be moved onto 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 onto 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 onto a standard variable rate.
Its research found that customers who are rolled onto their bank’s standard variable interest rate at the end of a fixed term mortgage deal face an average penalty of £439 a year.