Santander slammed after warning customers face 'seven-week delay'

Santander has found itself in hot water among mortgage brokers after opting not to pass on the base rate cut to borrowers for a whopping SEVEN WEEKS. Santander will not cut the interest rate for customers with a standard variable rate mortgage until December 3.

Rohit Kohli, Director at The Mortgage Stop, said: “Borrowers will expect that when savings are made available via a Bank of England rate cut, they’re passed on promptly, not at the convenience of the lender. When rates go up, lenders seem to pass on the increase to borrowers almost instantly. But when rates drop, as we've seen with the recent Bank of England cut, passing on the savings takes much longer.

“Santander tracker customers, for instance, won’t see their rates fall until late December—almost seven weeks after the rate cut. While this might be standard practice, it raises questions about fairness and whether lenders are truly acting in the spirit of Consumer Duty."

READ MORE Majorca demands UK tourists 'adopt' two habits and issues holiday warning

Stephen Perkins, Managing Director at Yellow Brick Mortgages, told Newspage: "Borrowers on trackers would rightly expect their next payment to reduce immediately following a base rate reduction, especially if there was, say, five working days between the interest rate cut and their next payment.

“For Santander to allow someone who makes their payments on the 20th of the month potentially to have two further months on the higher payment before seeing the benefit of the reduction flies in the face of Treating Customers Fairly. No doubt it's covered somewhere in the small print of the tracker mortgage terms, but if rates were instead increasing I am sure there would be far more urgency for the changes to be reflected. Meanwhile I am sure savings products will have seen their interest rates reduced immediately.”

Ben Perks, Managing Director at Orchard Financial Advisers, said: "It's interesting that, on the February 2, 2023 when the Bank of England increased the base rate, it took Santander just four weeks to implement the change. Now that rates have dropped, it will take over seven weeks.

“ In this day and age it can’t take so long to implement a rate change. Get on with it and help your borrowers save their hard earned money." Michelle Lawson, Director at Lawson Financial, said: “Most lenders will pass on the reduction within 28 days of the change so for Santander to have a wait time of almost two months is simply not right.

“Interestingly, following base rate rises in 2023, Santander upped the payments the next month. Is this in the spirit of Consumer Duty and Treating Customers Fairly? Any lender not passing on the reduction in payments in a timely manner isn't in the spirit of the product itself."