Santander is the latest in a long line of lenders to increase their standard variable rate (SVR). The costs of a typical £150,000 Santander mortgage will increase by £500 a year.
The mortgage giant is following in the footsteps of Halifax, which raised its standard variable rate earlier this year. The Royal Bank of Scotland, the Co-operative, the Bank of Ireland and the Clydesdale and Yorkshire banks have all already done the same thing.
Santander’s rate increase, from 4.24% to 4.74%, may not be their last. The lender has broken a pledge about future increases, lifting its SVR limit from 3.75 percentage points above the Bank of England base rate to 4.99. That paves the way for a hike up to 5.49% – which would cost the average borrower hundreds more again.
This all sounds like bad news. However, with the launch of some very competitive remortgage deals there has never been a better time to look at your options.