Effective from tomorrow (21st February) Santander for Intermediaries will raise rates across all products by between 0.23% and 0.35%.
All standard residential fixed rates will increase by between 0.23% and 0.34%.
Residential new-build exclusive fixed rates will increase by between 0.25% and 0.34%.
Residential large loan exclusive fixed rates and buy-to-let fixed rates will increase by between 0.23% and 0.33%.
For product transfers, selected residential fixes will increase by between 0.05% and 0.20%, and selected BTL fixes by between 0.05% and 0.15%.
Brokers must submit applications by 10pm in order to take advantage of current product rates before they are removed.
A Santander spokesperson said: “Santander continually reviews its rates based on a number of factors, such as wider market conditions including SWAP rates.
“We offer a range of competitive mortgage deals with five year deals starting from 4.17% and two year deals starting from 4.53%.”
Nicholas Mendes, mortgage technical manager at John Charcol, said: “The group of lenders offering interest rates below 4% has now diminished to just one, as Santander provides notice, they are withdrawing by the end of play today.
“HSBC stands as the sole remaining high street lender providing a fixed rate below 4%.
“However, in light of Santander’s decision, it is anticipated that HSBC will soon revise their rates, particularly considering that the 5-year money rate is slightly below 4%.
“Initial market expectations factored in multiple bank rate reductions throughout the year, commencing in March.
“However, recent data from both domestic and internationally, particularly the US, suggests that such reductions may not materialise until at least June.
“Given the nature of the market, those who may be hesitant to commit to a deal should act quickly to secure a deal.
“While we anticipate a reduction in fixed rates, the timeline for this adjustment may be somewhat longer than initially expected.
“It is important to note that, even if you secure a deal, there is still flexibility to make changes close to completion should a more favourable offer become available.”
Newspage asked brokers for further thoughts.
Reaction:
Ranald Mitchell, Director at Charwin Private Clients:
“The early optimism of 2024 is rapidly dwindling as Santander make notable increases to their fixed rate pricing.
“It’s bad news for the mortgage market, and with other lenders invariably following suit, bad news for mortgage borrowers.
“The road ahead is going to be less comfortable than many hoped for, at least until there are signs of inflation being brought under control.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Unfortunately, Santander won’t be the last lender that is likely to increase their rates this week in response to volatile swap rates.
“It’s as important as ever that if you’re buying or remortgaging you get the documents over to your broker when they ask for them in the format that’s requested.
“This way, you’ll hopefully not miss out on lower rates because once they’re gone, they’re gone.”
Justin Moy, managing director at EHF Mortgages:
“It was inevitable that Santander would follow the other High Street lenders, as they currently have some of the cheapest rates available in their quest for more market share.
“As has been said many times, rates will fall over time but there will be some bumps along the way before we get to those cheaper deals.
“Further falls in inflation and more pressure on the UK’s economy will be needed to see rates fall again.”
Mark Robinson, managing director at Albion Forest Mortgages:
“Rates can increase for many reasons, whether due to shifting swap rates, which have been rising in recent weeks, or to control the number of applications they receive.
“If lenders don’t control their application input levels, they can easily become overwhelmed and their service levels will quickly fall.
“But this highlights why people cannot become complacent that rates will continue to fall, and that the road ahead is set to be bumpy.”
Elliott Culley, director at Switch Mortgage Finance:
“It is not surprising that Santander have made this move.
“They have been one of the most competitive lenders for rates over the past week or so and it is not sustainable for any mortgage lender to remain in this position for too long.
“Borrowers should remain optimistic as rates should continue to lower over the long term. Small bumps in the road are to be expected.”
Ben Tadd, director at Lucra Mortgages:
“These fixed rate rises across the board were expected given where Santander have been pricing so competitively.
“Based on swap rate volatility in recent weeks and a need to control their service levels, it’s no surprise that Santander have pulled the trigger and hiked their rates.
“This will help ensure their mortgage underwriting can maintain the process timescales they strive for by slowing the flow of new applications being received.”
