"Although the movement in swap rates, which are a key indicator for fixed mortgage rates, has not been enormous it does look to be enough to put some of the very lowest rates in peril."
- David Hollingworth, associate director at L&C Mortgages
Santander is withdrawing its new business and product transfer 3.99% five-year fixed rates from 10pm tomorrow.
The bank says this is due to a recent increase in five-year market swap rates. In line with Santander's new broker pledges, it is giving a minimum of 24 hours’ notice of the withdrawal.
Santander's two-year 3.99% fixed rate will remain in place.
David Hollingworth, associate director at L&C Mortgages, commented: “Yesterday’s news of the increase in the rate of inflation meant that some of the lowest fixed mortgage rates on the market could be under threat.
That hasn’t taken long to feed through, and Santander has announced that it will be withdrawing its five-year fix at 3.99% at the end of tomorrow, citing an increase in market rates as the driver. Its two-year 3.99% fixed rate will remain in place.
"Co-operative Bank has also announced that it will temporarily withdraw some of its fixed rates from close of play tomorrow.
"It’s not all bad news. Barclays has managed to find room for improvement in its existing customer products and both Nationwide BS and Halifax have just announced their intent to cut rates from tomorrow.
"Although the movement in swap rates, which are a key indicator for fixed mortgage rates, has not been enormous it does look to be enough to put some of the very lowest rates in peril. It’s not a need for panic but borrowers that have been considering a new deal may want to reach a decision sooner rather than later in case of more movement in rates.
"The constant shift in mortgage rates can be frustrating but the good news is that the longer-term expectation for Bank of England base rate is that it will continue downwards as the year progresses. What we don’t know is when it will next fall and how far.”
