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Santander latest lender to increase mortgage rates as "any hopes of a rate war have been dashed"

Journalist: Justin Moy, Contributing Editor

ended 15. January 2025

A mixed bag from Santander, with rates mostly up and a few down, but the trend is clear to see across the bulk of the fixed rate range.

As lenders look to reprice to reflect the current Swap Rates, borrowers need to make decisions on their next deals with thse increases in mind. Will other lenders follow Santander? Has the great January Sale turned into a damp squib instead?

Newspage asked brokers for their views, below.

4 responses from the Newspage community

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Editor
Justin Moy
Managing Director at EHF Mortgages
This move from Santander was inevitable. With rising swap rates and most lenders operating on thin margins, they have little choice but to increase fixed rates. Any hopes of a rate war have clearly been dashed, with the government punting that opportunity out of the park. Today’s inflation announcement offers little relief as both borrowers and lenders now look to Labour for a swift and effective solution.
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Editor
Rohit Kohli
Director at The Mortgage Stop
It's not surprising as lender margins have reduced in recent weeks given the upward movement in swap rates and despite this morning's inflation dip, we're expecting interest rates to yo-yo for a while as most economists are suggesting an upward movement in inflation in the coming months.
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Elliott Culley
Director at Switch Mortgage Finance
Swap rates have risen throughout January, making it inevitable that mortgage lenders would follow suit with rate increases. With margins already tight, even small changes in swap rates quickly impact lenders, forcing them to adjust their offerings. However, Santander has managed to find some flexibility in other areas, and their decision to introduce rate reductions is a positive move.
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Iain Swatton
Director at Exemplar Financial Services
Santander’s adjustments to mortgage rates, both up and down, reflect the heightened uncertainty surrounding rates. Unlike in the past, when lenders extended rate-lock windows to provide clients with peace of mind and time to adjust, we’re now seeing a climate where many clients may feel increasingly anxious. This uncertainty highlights the value of working with a broker, who can help clients navigate rate fluctuations, provide clarity, and ensure they secure the most suitable deal in these unpredictable times.