Santander UK has announced a second increase in fixed mortgage rates in under a week.
Joining other lenders like Nationwide and NatWest that have raised fixed mortgage rates this week, the Spanish bank has raised its rates by up to 0.26%.
This Monday, Santander introduced a series of rate hikes for both fixed and tracker mortgages of up to 0.25%.
The latest rate changes will take effect after business hours on Friday.
As hopes fade for a summer interest rate cut by the Bank of England, lenders are reversing previous rate reductions.
The Bank of England’s monetary policy committee is set to make its next interest rate decision on Thursday, 9 May, with low expectations for a cut.
Financial markets are now predicting the first Bank of England rate cut to occur in September, with the likelihood of a second cut this year at roughly 50%, a significant decrease from earlier predictions of six cuts.
Stephen Perkins, managing director at Yellow Brick Mortgages, described the current market as a “chaotic game of pass the parcel, where lenders are scrambling to avoid offering the lowest rate when the music stops.”
Dariusz Karpowicz, director at Albion Financial Advice, noted that Santander’s second rate hike within a week “mirrors the broader market’s response to rising swap rates.”
“As summer approaches, we are seeing a trend that likely indicates a tightening of lending conditions, which could pose challenges for borrowers,” he added.
Katy Eatenton, a mortgage specialist at Lifetime Wealth Management, expressed frustration over Santander’s inaccurate pricing earlier in the week, noting that “it seems unlikely that rate reductions will be forthcoming anytime soon.”
