Santander has declared an impending increase in several of its fixed-rate mortgage offerings starting tomorrow.
This move comes as a reaction to recent higher-than-anticipated inflation figures, challenging the previous market optimism about potential rate cuts. The bank has specified that various standard residential fixed rates will experience a rise of up to 0.20% for both purchasing and remortgaging customers.
In a move that might dampen the aspirations of first-time homebuyers, Santander also announced the discontinuation of all residential first-time buyer exclusive fixed-rate deals that previously offered a £500 cashback. Additionally, the lender is set to remove its 90% LTV three-year fixed-rate mortgage, which currently stands at 5.18% with no fee, from its portfolio.
Santander clarified, however, that there will be no alterations to its new business large loan exclusives, tracker, buy to let rates, or the product transfer range. Kate Steere, editor and housing expert at personal finance comparison site finder.com commented:
“While borrowers thought they may be able to breathe easy again, this move by Santander shows that they’re not out of the woods yet. Last week’s unexpected rise in inflation has called into question predictions that the Bank of England will cut the base rate at its next meeting. Santander isn’t waiting around to see and has pulled the trigger on its fixed-rate mortgage rates. A bold move that we may see other lenders follow in the lead up to the Bank’s next rate announcement on 1 February.”
Rohit Kohli, director of The Mortgage Stop, told Sky News that these minor setbacks are “inevitable” and there will be some “ups and downs over the coming months”. He continued:
“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.”
