Buy To Let
Santander blames SVR rise on higher banking costs
Santander, the UK’s second largest mortgage lender is set to hike its Standard Variable Rate (SVR) by 0.50% from 4.24% to 4.74%, a move expected to affect several hundred thousand customers.
Santander wrote to those affected this week informing them the change will take place from 3 October this year.
A Santander spokesperson said: “We also told customers that we intend to increase our SVR Cap margin – the maximum amount above the Bank of England base rate that we can charge – from 3.75% to 4.99% from 24 September.
It said the move was prompted by the rising cost of mortgage provision and savings rates.
“Additionally, the cost of running a bank in the UK has increased dramatically through a combination of increased liquidity, capital and funding requirements.”
Halifax was the last substantial lender to increase its rates to 3.99% in May, after a 0.49% increase affecting 850,000 borrowers. Bank of Ireland also announced a two-stage SVR hike before that, from 2.99% to 3.99%, with a final rise to 4.49% next month affecting 100,000 customers. ING Direct, Yorkshire/Clydesdale Banks and Co-operative Bank also increased SVRs this year and RBS made changes to its offset loans.
Click here to view our Sponsored Content Hub
Santander’s SVR mortgage holders will see an average increase of £26 per month for a £100,000 mortgage and offered a mortgage calculator to work out new monthly payments and a customer helpline number for concerned borrowers on 0845 600 0346.
The lender said: “We will consider all particular customer circumstances that might lead to financial difficulties as a result of this change. We will work with our customers on an individual basis and we have developed a programme to help them manage any impacts – consisting of payment holidays, waiving charges or even resetting mortgages as appropriate.”