Home buyers could have to find extra cash each month as Santander joined its rivals in announcing hikes.
The bank is raising rates on new deals by up to 0.35 percentage points against the background of the Middle East crisis. Those taking out larger mortgages face an even steeper increase. Homeowners signing up for a new £300,000 mortgage over 25 years would have to pay around £55 a month – roughly £660 more a year.
The changes are part of a wider blow for borrowers after lenders across the market pushed up mortgage rates amid rising funding costs and renewed turmoil in global markets.
From Tuesday, March 17, Santander will increase rates across a wide range 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.
Meanwhile, borrowers switching to a new deal with Santander through its product transfer range will see residential and buy-to-let rates increase by up to 0.30 percentage points.
Mortgage brokers warned the latest rise could force some buyers to rethink 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.”