Santander and Co-operative Bank announce rate changes

Santander has just announced that, on Tuesday 12 March, it is launching a 95% LTV 2 year fixed rate for residential purchases and that it is increasing residential fixed and tracker rates in the new business and product transfer ranges.

It’s also reducing other selected residential fixed rates for remortgage clients, and all Buy to Let fixed rates in the new business range.

The Co-operative Bank for Intermediaries has also announced a raft of rate changes, including mainstream product switch 2, 3 and 5 year fixed products being increased by up to 0.72%, and buy-to-let product switch 2, 3 and 5 year fixed products increased by up to 1.09%.

Shaun Sturgess, director at Sturgess Mortgages Solutions Ltd said, “It’s concerning to see another mainstream lender increase their product transfer rates knowing how affordability has changed and that consumers may be limited in their switching options.

“Lenders should not be cashing in on an affordability crisis. Co-op, with their horrendous service levels, are doing many consumers a favour by increasing their rates.

“That will see them drop further down the sourcing lists. And though it’s a positive change from Santander from the 95% LTV perspective, it’s not quite enough to shift the likes of Halifax, Nationwide and TSB from the top of the tree.”

Gary Bush, financial adviser at MortgageShop.com said, “Confusing mortgage market pricing changes are being witnessed today with Santander following the previous dubious move by NatWest of increasing their rates for their existing borrowers, at a time when household budgets are strained and often account holders now don’t fit the expenditure calculations to allow them to switch lenders.

“It’s worrying to see lenders increasing rates to mortgage-locked households and decreasing those for people remortgaging to them.

“To add to the damage to the market, the Co-operative Bank has increased some of its rates today by up to 1.09%, a massive chunk into people’s mortgage bills.

“On the whole, after last week’s Budget and the markets not reacting negatively, brokers were expecting to see downward mortgage rate movements, not upward ones.”