Masthaven Bank to stop offering savings accounts and mortgage loans over the next two years - what it means for you
Masthaven Bank is to stop offering personal savings accounts and home mortgages to both new and existing customers over the next two years, it's been announced today (1 February). The provider plans to completely exit these UK markets by the end of 2023 - though there's no immediate change for savers or borrowers.
The bank said it has made this decision following a "comprehensive strategic review of the business" conducted in a bid to "grow the bank".
Here's what's happening.
Masthaven savings account holder? Your funds are safe and you likely won't need to take action for now
Some of Masthaven Bank's savings products have featured on MoneySavingExpert.com in the past, with various fixed-rate savings accounts making it into our Top savings guide and into our weekly email in the past.
Here are the key need-to-knows for savers:
- If your rate is currently fixed, funds will either be returned at account maturity, or when the bank withdraws from the market - whichever is sooner. This means you can't access your cash penalty-free or switch elsewhere beforehand. For accounts maturing shortly, the bank will continue to offer reinvestment options but later this year the option to reinvest will be withdrawn, so your money will be returned to your nominated bank account upon maturity.
- If you have a variable 'E-saver' account, which is for matured funds where no alternative account is given, your money will be returned when the bank withdraws from the market, or you can access cash penalty-free yourself beforehand. This account currently pays 0.75% variable so it can't be beaten by any easy-access accounts - you can, however, earn more by fixing elsewhere - see below for the current best buys.
- Interest will be paid at your agreed rate while you're still a Masthaven customer. However, if your account closes before maturity it's unclear if you'll be paid interest until the end of its expected term on top. We've asked Masthaven and we'll update this story when we know more.
- Your savings will continue to be protected by the Financial Services Compensation Scheme (FSCS) while you're still with Masthaven. The FSCS scheme protects cash up to a maximum of £85,000, right until the bank completes its withdrawal from the market.
Masthaven says it will contact savers in a few months with more information regarding the next steps - so ensure it has your up-to-date contact details. You can check this by logging into your online savings account, from where you can also modify your details by selecting 'Change your details'. For further info you can also see Masthaven Bank's FAQs for savers.
You can earn 0.71% easy-access or up to 2.12% when you fix elsewhere
While Masthaven Bank will still offer six-month fixed-term savings accounts to new customers for a limited time, its rates for new customers can be beaten elsewhere (though if you're on an existing higher rate, check before switching):
- If you need access to your cash you can earn up to 0.71%. Investec pays the top easy-access rate of 0.71%, though you need to save at least £5,000 to open the account. If you've less in savings, Cynergy Bank pays 0.7% and its account can be opened with just £1. Both accounts allow unlimited withdrawals and can be opened online.
- If you're willing to lock your cash away for set periods, you can earn significantly more interest. Union Bank of India pays the top one-year fixed rate of 1.4%, although you can beat this rate if you're new to savings marketplace Raisin and are willing to work a little to claim £50 cashback with Charter Savings Bank's 1.33% account.
Meanwhile, the top two-year fixed rate of 1.62% comes from Charter Savings Bank, though you'll need to save at least £5,000 (if you've less, take a look at app-based Atom Bank).
For more savings accounts, some paying up to 2.12% when you fix for five years, see our Top savings guide.
Masthaven mortgage or bridging loan borrower? Continue to repay as normal though check if you can save by switching
Unlike Masthaven's savings accounts, which it plans to completely close, the lender is hoping to sell on its mortgage book. A decision is yet to be made on whether to sell on, or simply run down, its bridging loans. This could mean a shake-up for borrowers in future but for now your terms remain the same and you should continue to make repayments as normal (the bank will also still collect repayments as usual).
When Masthaven finds a lender to take on these loans, it will contact customers to let them know - so again, ensure it has your up-to-date contact details using the info above.
Of course, you can use this as a good opportunity to check if you can move your loan or mortgage elsewhere - particularly with a Bank of England base rate rise potentially on the cards. For more information on mortgages, check out our wide range of guides and our Mortgage best buys tool.
You can also see Masthaven Bank's FAQs for borrowers.