Santander increases selected fixed rates as swap rates wobble

Santander has announced a small increase to some of its fixed rate products, starting from 24th January.

The lender increased selected residential fixed rates for both purchase and remortgage clients – as well as withdrawing all of its first-time buyer fixed rates with £500 cashback.

A 90% loan-to-value (LTV) 3-year fixed rate for purchase clients was also withdrawn.

Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, said: “This latest repricing from Santander had been expected due to the increase in swaps from when these original deals were priced.

“It’s only a surprise that it’s taken this long.

“I expect we will see a few lenders among the best to make slight adjustments, though this isn’t a long term trend as rates are expected to decrease over the year.”

Newspage asked brokers for their thoughts on these developments, and whether the mortgage price war will now start to cool a little as a result.


Justin Moy, managing director at EHF Mortgages:

“Recent increases in swap rates have caused a few lenders to increase rates over the past week or so.

“Meanwhile, others are still launching cheaper deals, but they may restrict availability for a few days whilst borrowers and brokers scramble for alternative deals.

“I suspect the overall trend of rate reductions will continue as predicted, but a few bumps along the way are inevitable.

“This emphasises the need to work with mortgage brokers who can continue to look for the best deals in a changing market, and prospective borrowers need to have their documents ready for any applications. to avoid disappointment.”

Rohit Kohli, director at The Mortgage Stop commented:

“We are going to see some ups and downs over the coming months from lenders, so these kinds of minor setbacks are inevitable.

“Inflation rose unexpectedly, if only marginally last week, giving lenders pause for thought but a day or two later the retail sales data for December was published and was dreadful, which will highlight the fragility of the economy to the Bank of England.

“The one positive to take out of it all is that lenders are fighting to lend money after a poor 2023 but how long it lasts is anyone’s guess.”

Ben Perks, managing director at Orchard Financial Advisers:

The constant rate reduction announcements we were enjoying were destined to stop at some point. Swap rates have increased slightly this week, which could be a factor, but hopefully this is just Santander ‘turning the tap off’ because they priced so competitively last week and have seen an influx of applications.

“We will see some ups and downs over the coming weeks so borrowers shouldn’t be overly concerned.”

David Sharpstone, director at CIS Mortgage Advice:

This doesn’t surprise me in the slightest.

“Santander has long suffered from inconsistent service levels, and as soon as they loosen the tap the flow of applications increases, then their time to offer decreases.

“I suspect this is more an application management response than anything to have market wide concerns about.”

Lewis Shaw, owner and mortgage expert at Shaw Financial Services:

“Some rate increases were always on the cards, and we’ve been trying to warn of this over the past two weeks after swaps and gilt yields rose in response to the double whammy of higher-than-expected inflation numbers and the developing conflict in the Red Sea.

“Until we have more positive economic data showing inflation cooling and the conflict in the Middle East finds a solution, the rate war is, by and large, finished.

“This year’s mantra for prospective buyers or those needing to renew is don’t count your chickens. We are not yet out of the woods, and black swans are seemingly becoming more frequent.”

Andy Keehner, managing director, Finanze Strategy at Finanze:

“We should expect rate changes as lenders adjust to prevailing economic conditions.

“Lenders have come out of the blocks this month with many new products and offers, all are strong signals of their intentions to do business.

“It’s never been more important for brokers and lenders to work together to ensure clients are fully informed and take a longer-term view to increase stability and confidence.”

Stephen Perkins, managing director at Yellow Brick Mortgages:

“Many lenders are taking part in a rates Hokey Cokey dance at the moment.

“Announcing rate reductions, getting an influx of applications and then increasing their rates to slip back into the pack. The only exception being Nationwide who are yet to reduce and are picking up the rear.

“As swap rates fluctuate and confidence ebbs and flows with every economic data release, we will continue to see more rate movements up and down as lenders secure the business they require without being inundated.”

Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management:

“Santander has been sourcing at the lowest for the last week.

“This rise may be due to service levels, plus a wobble in swap rates.

“As always, I am advising clients to start looking at remortgages six months in advance to secure the best rates available to them at all times.

“Rates can always be reduced, but one they’ve increased, they may not come down again in the required timeframe.”

Ken James, director at Contractor Mortgage Services:

“The rate war drum may be broken, or at least temporarily out of order.

“The fact that swap rates have been wobbling is a clear indicator that the tide may have changed, even if it’s a temporary shift we need to stay realistic and keep the wheels on the bus.

“Deals will always rise and fall but with the level of rates having been high for some time the downward momentum has created a sense of positivity that has been missing.

“Now with even a small rise will this positivity started to drop off?”

Elliott Culley, director at Switch Mortgage Finance:

“With some mortgage lenders cutting rates aggressively throughout January, it was likely there would be some rate increases from lenders if swap rates increased.

“Lenders’ margins at the moment are tight, so this increase will be expected. Borrowers should not panic as its unlikely this will be a trend and overall, across the year, predictions are for rates to fall further.

“The lesson to learn here for borrowers is secure a rate as soon as possible to ensure you obtain the most cost effective product.”