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Santander hikes rates and pulls products

Santander hikes rates and pulls products

Santander has become the latest lender to raise interest rates and has pulled several products from its mortgage range.

The lender is to increase selected fixed and tracker rates by up to 0.2 percentage points from tomorrow (31 October).

It will withdraw the remortgage specials two-year fix at 1.39 per cent and the five-year fix at 1.79 per cent, both at 60 per cent loan-to-value (LTV).

Three two-year buy-to-let fixes are also being pulled, along with a first-time buyer exclusive five-year fix at 2.39 per cent to 80 per cent LTV.

Rates for 90 to 95 per cent LTV products are being retained, while the 60 per cent LTV five-year fix with a £999 product fee is being held at 1.79 per cent.

Meanwhile, the 95 per cent LTV five-year fix first-time buyer exclusive, with a 4.54 per cent rate and no product fee, is being made available to all purchase buyer types.

Santander’s announcement follows a spate of rate increases from major lenders in anticipation of a rise in the Bank of England base rate on Thursday (2 November).

After mortgage lenders began to increase their rates at the end of September, a spokesperson for Santander told FTAdviser the bank had “no immediate plans” to up its interest rates.

Phil Anderson, director at Aberdeen-based Phil Anderson Financial Services, said: “Because the lenders are anticipating a base rate rise, we have seen quite a few start to increase rates. It is an excuse to jump the gun.

“[A base rate rise] is probably to be expected - the rates have been so low for such a good time. If it is just a quarter of a per cent, I can’t see it making a huge impact - but if it starts to rise higher, it will have more of an impact on things.

“In Aberdeen, things are really pretty down because of the oil. We are probably feeling it worse than a lot of other places, but the rates have been so competitive for a while.

"I can’t see them putting it up too much – it would put people off going for mortgages and stall the housing market even more."

simon.allin@ft.com