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"Tide is turning" as Santander announces mortgage rate changes

ended 11. October 2024

Santander has announced various changes to its mortgage rates, with some going up, others coming down. From Tuesday, the lender is increasing selected residential fixed rates by up to 0.22% and reducing them by up to 0.13% for remortgage clients. One broker said you'd need to bring Ludwig Wittgenstein back from the dead to understand the logic behind all this. Another warned borrowers to stop holding out for further rate falls as they are not guaranteed.

New Business

  • Selected residential fixed rates reducing by up to 0.13% for remortgage clients.
  • All large loan fixed rates reducing by 0.10%.
  • Selected residential fixed rates increasing by up to 0.22% across purchase, remortgage and green products.
  • Selected new build rates increasing by up to 0.10%.
  • Selected Buy to Let and green Buy to Let fixed rates increasing by 0.03%.

Product Transfers 

  • Selected residential fixed rates reducing by up to 0.16%.
  • Selected residential fixed rates increasing by up to 0.12%.
  • Selected Buy to Let fixed rates increasing by 0.03%.

9 responses from the Newspage community

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Darryl Dhoffer
Founder at The Mortgage Geezer
We are now seeing the interest rate reduction train grind to a halt, with this mammoth of a lender raising rates as SWAP rates continue to go up. It's just a matter of time now before other big lenders follow suit, so for those borrowers still hedging their bets on rate reductions, it's time to act now.
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Justin Moy
Managing Director at EHF Mortgages
Another lender with a smorgasbord of rate changes, with those purchasing looking to be borrowers who will miss out this time, as remortgage clients celebrate an unexpected cut on some deals. Lenders are certainly trying to remain positive about rates overall, hoping that the wobbles in Swap rate pricing are just temporary and that we continue to see longer-term rate improvements into 2025.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
A seismic shift could be heading towards the mortgage market, with this latest set of increases acting as the canary in the coal mine. In the coming months, we could be entering a challenging time for homeowners and first-time buyers, with the goalposts of affordability shifting wildly. Santander's decision to announce a mixed bag of improvements and increases reflects the market's precarious equilibrium and the tradeoff between lender profitability and consumer demand. The reliance of lenders on swap rates, essentially a reflection of market expectations for future interest rates, for pricing mortgage products, means that sudden increases in these rates can directly impact their offerings. Santander's decision to raise mortgage rates is not occurring in a vacuum and instead reflects broader market uncertainties and fears surrounding Chancellor Reeves' forthcoming 'painful' Budget.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
The tide is turning, with lenders raising rates in the hope that they will not be beached when the Autumn budget is unveiled. Borrowers who had been holding out for better deals may have missed the boat.
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Craig Fish
Director at Lodestone Mortgages
This mixed bag of changes is more about Santander balancing the books across all their products, rather than any significant changes in market conditions. Lenders often tweak rates to attract or repel certain types of business such as too much lending at higher loan-to-values.
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Rohit Kohli
Director at The Mortgage Stop
Another lender tweaking rates to try to manage business and attract certain types of borrowers. It feels like many lenders don’t know whether they want to stick or twist at the moment and that means uncertainty, which is never great for anyone.
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Harps Garcha
Director at Brooklyns Financial
Given the events of the past week, this development was predictable.
However increasing for purchasing and reducing for remortgages is mind-boggling. Mortgage customers who have been waiting for rates to drop further may want to consider taking action now. With rates expected to rise as SWAP rates continue to edge up, housing stock hits a four-year high, and the looming Budget, it’s clear these factors won’t help stimulate activity in the property market. Unfortunately, this could further dampen momentum in an already challenging environment.
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Ken James
Director at Contractor Mortgage Services
Confucius says raise rates, reduce rates and keep people guessing. Santander must have read straight from the same book as these ups and downs are sending very mixed message to the public.
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Hannah Bashford
Director at Model Financial Solutions
You'd need Ludwig Wittgenstein to find the logic in the current yo-yoing of mortgage rates. It feels like lenders are trying to position themselves to attract certain customers to fulfil their end-of-year lending targets, but are making themselves less attractive to others. Why else would they be tweaking rates both up and down? Swaps rates rising seem to be having little effect on these large lenders as they continue to reduce rates. If you’re looking at mortgages get something booked in and review, review, review.