Santander has become the first “big six” bank to raise mortgages rates amid the shock rise of inflation.
There was hope that the Bank of England would reduce interest rates, but with inflation rising this is now looking unlikely.
In December official figures showed that inflation rose to 4% which was above what economist’s had expected.
Santander has announced on Wednesday that there will be a number of increases and some rates will rise between 0,05 and 0.2 percentage points.
Ben Perks, managing director at Orchard Financial Advisers, said: “The constant rate reduction announcements we were enjoying were destined to stop at some point.
“Swap rates have increased slightly this week, which could be a factor, but hopefully this is just Santander ‘turning the tap off’ because they priced so competitively last week and have seen an influx of applications.
“We will see some ups and downs over the coming weeks so borrowers shouldn’t be overly concerned.”
Justin Moy, managing director at EHF Mortgages, said: “I suspect the overall trend of rate reductions will continue as predicted, but a few bumps along the way are inevitable.”
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