Brokers react to Santander and Co-operative Bank mortgage rate changes

Santander has just announced that, on Tuesday 12th March, it is launching a 95% loan-to-value (LTV) 2 year fixed rate for residential purchases and that it is increasing residential fixed and tracker rates in the new business and product transfer ranges.

It is also reducing other selected residential fixed rates for remortgage clients, and all buy-to-let (BTL) fixed rates in the new business range.

The Co-operative Bank for Intermediaries has also announced a raft of rate changes, including mainstream product switch 2-, 3- and 5-year fixed products being increased by up to 0.72%, and buy-to-let product switch 2-, 3- and 5-year fixed products increased by up to 1.09%.

Newspage asked brokers for their thoughts, below.


Shaun Sturgess, director at Sturgess Mortgage Solutions Ltd:

“It’s concerning to see another mainstream lender increase their product transfer rates knowing how affordability has changed and that consumers may be limited in their switching options.

“Lenders should not be cashing in on an affordability crisis.

“Co-op, with their horrendous service levels, are doing many consumers a favour by increasing their rates.

“That will see them drop further down the sourcing lists.

“And though it’s a positive change from Santander from the 95% LTV perspective, it’s not quite enough to shift the likes of Halifax, Nationwide and TSB from the top of the tree.”

Robert Timm, managing director at Sunland Mortgages:

“The relatively peaceful end to last week is most definitely now in the past.

“Three lenders announcing mostly increases to their range has caused disheartenment in this office, particularly when gilts data has been looking positive.

“Hopefully this is a temporary blip.”

Stephen Perkins, managing director at Yellow Brick Mortgages:

“This seems to be more about tweaking the sourcing system placements and business mix rather than responding to any market movements or economic data.

“Most of the increases and reductions are minor tweaks unlikely to create any ripples.”

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

“The mortgage seas are getting choppier than ever despite the non-event that was the Budget.

“Now is the time to grab a lifejacket.”

Gary Bush, financial adviser at

“Confusing mortgage market pricing changes are being witnessed today with Santander following the previous dubious move by NatWest of increasing their rates for their existing borrowers, at a time when household budgets are strained and often account holders now don’t fit the expenditure calculations to allow them to switch lenders.

“It’s worrying to see lenders increasing rates to mortgage-locked households and decreasing those for people remortgaging to them.

“To add to the damage to the market, the Co-operative Bank has increased some of its rates today by up to 1.09%, a massive chunk into people’s mortgage bills.

“On the whole, after last week’s Budget and the markets not reacting negatively, brokers were expecting to see downward mortgage rate movements, not upward ones.”

Rohit Kohli, drector at The Mortgage Stop:

“Major lenders like NatWest, Santander and the Co-operative Bank announcing increases is not the start to the week borrowers wanted.

“It’s looking like lenders are thinking any cut in the base rate now won’t happen until later this year, which will worry the thousands of people who were hoping the Bank of England would take some form of action in the coming weeks as their fixed rates come to an end.”

Elliott Culley, director at Switch Mortgage Finance:

“Good to see Santander being the first lender to start to bring in reductions to rates, albeit some others are increasing.

“This may be the first green shoots that rates may now start to reverse their trajectory and fall once more.”

Ben Perks, managing director at Orchard Financial Advisers:

“The changes to Santander’s product rates show that the lender is taking a more considered approach.

“Rather than just applying rises to the whole product range, they are reducing in some areas.

“This shows a willingness to improve rates where possible.

“Swap rates are marginally lower this morning, hopefully they will fall further and we will see more reductions from Santander and other lenders soon.”

Michelle Lawson, director at Lawson Financial:

“Rate increases are the new norm for now.

“The Co-op should really be pulling from the market completely to bring their shambolic service levels back on track as they do have some niche criteria that could see them not stemming the flow of business as much as they would like.”

Mark Robinson, managing director at Albion Forest Mortgages:

“A mixed bag of good news and bad from Santander today.

“Interestingly, most of the instability is coming from the high street lenders who, it seems, were perhaps too quick to drop rates, as most other lenders have kept their rates quite stable.

“It certainly appears some of the high street lenders jumped the gun.”