These changes form part of a broader hit for borrowers as lenders across the board ramp up mortgage rates
Home buyers may need to fork out extra each month as Santander follows competitors in announcing rate increases.
The bank is hiking rates on new deals by up to 0.35 percentage points amidst the backdrop of the Middle East crisis. Those taking out larger mortgages are set to face even steeper rises. Homeowners securing a new £300,000 mortgage over 25 years would have to shell out approximately £55 a month – roughly £660 extra per year.
These alterations form part of a broader hit for borrowers as lenders across the board ramp up mortgage rates due to escalating funding costs and renewed upheaval in global markets. From Tuesday, March 17, Santander will boost rates across a broad spectrum of new deals, including those for first-time buyers, home movers, large loans, remortgages and buy-to-let mortgages, by up to 0.35 percentage points.
Simultaneously, borrowers transitioning to a new deal with Santander through its product transfer range will witness residential and buy-to-let rates rise by up to 0.30 percentage points. Mortgage brokers have warned that this latest increase could compel some buyers to reconsider their plans.
Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, said: “The bad news for borrowers just keeps piling up. The rate increases we’re now seeing and their impact on potential payments are such that we may see home buying or moving plans shelved.”
However, Mr Perkins said there was hope the current volatility could prove temporary.
“Hopefully, this will be a short-term blip that will blow over once stability is restored in the geopolitical landscape. But for now the mortgage market is extremely volatile and lenders’ nerves are fraught.”
Craig Fish, director at London-based Lodestone Mortgages, warned the market could be entering another turbulent period. He told Newspage: “We’ve had rate hikes across the board: new business, product transfers, buy-to-let, the lot.”
Mr Fish warned lenders were scrambling to protect their margins.
“Lenders are repricing fast and furiously to protect margins. The green shoots we’d carefully nurtured through early 2026, with sub-4% deals, cautious optimism and clients finally ready to act have been torched in a matter of days,” he said.
“It feels uncomfortably like 2022 all over again. The advice right now is simple: don’t wait, don’t speculate. Act.”
Simon Bridgland, broker at Canterbury-based Charwin Private Clients, said: “Rates have been increased, products pulled, costs increased and there’s no reprieve on the horizon.”
Aaron Strutt, product and communications director at London-based Trinity Financial, said the move had been widely expected.
“Santander has been offering many of the cheapest rates in the market for a while, so these price hikes were expected,” he said.
He warned that some of the lowest mortgage deals could soon disappear.
“Even with these rate rises, Santander’s fixes will still be reasonably priced given everything that’s going on at the moment, but Nationwide will be offering stand out best buy rates and will be busier. That in turn means it will have to push up its pricing sooner rather than later. It seems like the remaining sub-4% fixes will be pulled next week.”
