Santander has announced a significant increase in mortgage rates effective from 22 July, with rises of up to 0.3% impacting various loan-to-value (LTV) products. This change comes as a response to rising swap rates, following similar moves by other major lenders like NatWest and Nationwide.
How Will Mortgage Rates Change?
The new rates will affect a range of products across both residential and buy-to-let (BTL) categories. For first-time buyers, the two-year fixed rate at 60% LTV will increase by 0.16% to 4.6%, while the 90% LTV option will rise by 0.3% to 4.99%. Homemovers will see similar increases, with a 60% LTV option rising by 0.23% to 4.55% and the 90% LTV counterpart increasing by 0.25% to 4.89%. Additionally, all product transfers for fixed residential rates will see increases of up to 0.2%.
What About Buy-to-Let Mortgage Rates?
On the buy-to-let front, Santander is implementing increases of up to 0.25% on all two- and five-year fixed rates at 60% and 75% LTV. This means landlords looking to secure new BTL deals may need to adjust their budgets accordingly. Furthermore, Santander has expanded its 10-year fixed-rate offerings, now including options for first-time buyers and homemovers at LTVs ranging from 85% to 95%.
What This Means for Borrowers and Investors
For borrowers, including first-time buyers and homemovers, these rate hikes mean higher monthly repayments and potentially reduced borrowing capacity. Investors in the buy-to-let market should also prepare for increased costs, which could affect rental yields. It’s essential for all potential borrowers to review their options and consider locking in current mortgage rates before further increases occur.
Frequently asked questions
How will these rate increases impact my mortgage payments?
The increases will raise your monthly payments, particularly if you’re on a variable rate or looking to remortgage. It’s advisable to reassess your budget and consider fixed-rate options.
Should I act now or wait for potential future rate changes?
Given the current trend of rising rates, it may be wise to act sooner rather than later. Locking in a rate now could save you money in the long run.