Santander has announced it will be increasing interest rates across multiple mortgage products from tomorrow.
Experts are warning that this is “bad news” for homeowners, prospective homebuyers and the wider mortgage market.
The lender is hiking mortgage rates by up to 0.34 per cent across all residential and Buy to Let fixed rates in the new business range, including New Build and large loan exclusives for residential clients, from February 21.
As part of this move, Santander is also raising selected residential and Buy to Let fixed rates in the product transfer range. However, the lender has not announced any changes to tracker mortgage rates.
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Santander is raising mortgage rates once again
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Ranald Mitchell, the director at Charwin Private Clients, told Newspage that the “optimism” of early 2024 is already “dwindling”.
He said: “It's bad news for the mortgage market, and with other lenders invariably following suit, bad news for mortgage borrowers.
“The road ahead is going to be less comfortable than many hoped for, at least until there are signs of inflation being brought under control."
Lewis Shaw, the owner of Shaw's Financial Services, added: "Unfortunately, Santander won't be the last lender that is likely to increase their rates this week in response to volatile swap rates.
“It's as important as ever that if you're buying or remortgaging you get the documents over to your broker when they ask for them in the format that's requested.”
Last week, Santander confirmed it would be reducing all buy-to-let and selected mortgage rates by up to 0.16 per cent.
Those looking to remortgage or get on the property ladder have been hoping for further rate reductions in light of the past year.
Mortgage repayments have skyrocketed for millions of households amid the Bank of England’s decision to raise interest rates in its fight against inflation.
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The Bank of England base rate is at a 15-year high of 5.25 per cent GB NEWSAnalysts are pricing in significant cuts to the base rate, which is currently at 5.25 per cent, in the later half of the year.
Justin Moy, the managing director of EHF Mortgages, attempted to ease concerns and cited that rates will likely drop later in the year.
Mr Moy explained: "As has been said many times, rates will fall over time but there will be some bumps along the way before we get to those cheaper deals.
“Further falls in inflation and more pressure on the UK's economy will be needed to see rates fall again."