Santander for intermediaries have sent out emails to all registered mortgage intermediaries today announcing that they will be freezing their current mortgage product rates and they will avoid raising mortgage rates for at least one month. In comparison, Nationwide and Virgin Money have also announced, within minutes of Santander’s announcement, that they will be increasing their mortgage rates!
It seems like the only thing that we are talking about right now, but it is a topic that really can’t be avoided. We are encouraging all our clients who already have mortgages to contact us as soon as possible to go through a financial health check in case their rates rise. Although Santander are freezing their new business and product transfer rates temporarily, unfortunately this will likely change as well in the face of inflation and possible recession.
In their announcement email, Santander have specifically said:
- Completion deadlines and product end dates will be rolled on by one month.
- Charge and benefit end dates on both ranges will roll on by one month and product codes will be replaced.
- Completion deadlines will be rolled on to:
- 5 December 2022 for product transfers
- 31 January 2023 for purchases
- 3 February 2023 for remortgages
- Product codes on all new business and product transfer fixed rates will be replaced
In a simultaneous and almost calculated announcement, Nationwide and Virgin Money also sent out announcements to all registered mortgage intermediaries to say that they would be increasing selected fixed rates for new and existing borrowers. Nationwide will be increasing their rates by up to 0.34%. And Virgin Money by up to 0.30%.
An example of how the new rate increases with Nationwide will look is as follows:
- Example 80% LTV 5 year fixed previously 3.30% without a fee, 3.10% with a £999 fee – Now 3.69% without a fee, 3.44% with a £999 fee. So, if your mortgage balance was £300,000 without a fee and you had a 20-year term, you would have originally paid £1,709 a month or £20,508 a year. With the new rates this would go up to £1,769 per month or £21,228 a year.
Virgin Money have specifically said the following about their rate increases:
- All 5-year fixed rates with a product fee will be increased by 0.30%.
- All other fixed rates will be increased by 0.20%.
Product Transfer products
- Selected fixed rates will be increased by up to 0.30%.
An example of how the new rate increases with Virgin Money will look is as follows:
- Example 80% LTV 5 year fixed previously 3.00% without a fee and 2.80% with a £999 fee – Now 3.30% without a fee, 3.10% with a £999 fee. So, if your mortgage balance was £300,000 without a fee and you had a 20-year term, you would have originally paid £1,664 a month or £19,968 a year. With the new rates, this would go up to £1,709 a month or £20,508 a year.
We are literally seeing mortgage rate increases every day so if you or someone you know is worried that they might be on the wrong product or paying too much for their current mortgage, please give our advisors a call to go through your option as soon as possible.