Santander to launch “Zero” current account for mortgage borrowers

by Gill Montia

Story link: Santander to launch “Zero” current account for mortgage borrowers

Santander is launching a “Zero” current account at the beginning of next year, to coincide with its rebranding of Abbey, Bradford & Bingley and Alliance & Leicester to the group name.

Customers going into the red, either authorised or unauthorised, will not be charged a fee and will pay interest at a market-leading rate of 12.9%.

In addition, withdrawals from overseas ATMs will be fee free and customers who pay at least £1,000 a month into their accounts will be paid interest at 6% on credit balances for the first year.

The deal will be made available to those with a Santander mortgage and existing customers of Abbey and Bradford & Bingley will qualify when the launch takes place on 11th January 2010.

Alliance & Leicester mortgage borrowers will come on board once the bank is rebranded later in the year.

Last month, Santander reported strong growth at Abbey with over 800,000 new bank accounts opened in the nine months to the end of September.

The lender is known to be keen to extend its share of the UK mortgage market having captured 20.5% in the third quarter of 2009 and achieved £5.1 billion of net lending in the first nine months of the year.

In addition, arrears of three months or more stood at 1.34% in the third quarter, compared with an industry average of 2.43%.