Chaos could be looming for customers of 311 RBS branches in England and Wales and 7 branches of NatWest in Scotland. State-backed RBS has sold the branches to Spanish owned Santander, a bank with a notoriously poor customer service record.
Anybody who has taken out a contractor mortgage with an RBS branch that has been sold will have their account transferred automatically to Santander in the next year to 18 months and these customers are already raising concerns over interest rates.
For example, the standard variable rate on a RBS/Nat West mortgage is currently 4%, whilst Santander’s rate stands at 4.24%. On a £150,000 mortgage, this would mean the transferring RBS customers would need to pay an extra £20 a month.
A Santander spokesperson said it was too early to talk about mortgage rates but customers will be kept fully informed throughout the transition process.
Elsewhere on the mortgage front, borrowers are being advised to weigh up the difference in arrangement fees when looking for best buy mortgage deals.
New research from moneysupermarket.com suggests borrowers could lose out on more than £3,000 on a two year £150,000 mortgage deal. For example, with a rate of 2.24% and a 3% arrangement fee, the repayments would total £20,300 over the 2 year period whereas a rate of 2.89% and a £99 arrangement fee would lead to a repayment of just £17,200.
Clare Francis, the website editor, said it was important not to get blinded by the attractive headline rates. Once the arrangement fees are factored in, these mortgages suddenly aren’t as wonderful as they first appeared to be.
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