Some sub-4% mortgages will vanish from the market from Friday
Some sub-4% mortgage deals will disappear from the market from Friday, when Santander UK pulls some products from sale just over a week after they launched, amid changing market conditions.
The bank notified brokers on Thursday that from 10pm on February 21, it will be removing its 3.99% five-year, fixed-rate mortgage products.
It said the decision has followed an increase in five-year swap rates, which are used by lenders to price mortgages, across the past week.
It means that a 60% loan-to-value, five-year, fixed-rate at 3.99% for home buyers and five-year, fixed-rate deal at 60% LTV for homeowners looking to remortgage, at 3.99%, will be withdrawn from sale.
Santander will continue to offer two-year, fixed-rate mortgages at 3.99%, both to home buyers and those looking to re-mortgage. These deals also require a 40% deposit or equity.
The sub-4% deals were launched onto the market by Santander UK on Thursday last week.
On Wednesday this week, mortgage experts suggested that deals below 4% may be short-lived, following stronger-than-expected inflation data.
Figures released by the Office for National Statistics (ONS) on Wednesday showed that the rate of Consumer Prices Index (CPI) inflation rose to 3% in January, from 2.5% in December. Analysts had predicted a 2.8% increase.
Despite the higher-than-expected inflation data, Santander said its forecasts are still pointing to further Bank of England base rate cuts this year.
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
'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.'
Mr Hollingworth continued: 'It's not all bad news. Barclays has managed to find room for improvement in its existing customer products and both Nationwide Building Society 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.'
Nationwide Building Society said that, from Friday, it will reduce rates by up to 0.33 percentage points, with its rates now starting from 4.09%.
The new rates include a five-year, fixed-rate at 60% LTV with a £1,499 fee with a rate of 4.09%, having been reduced by 0.05% percentage points.
Carlo Pileggi, Nationwide's senior manager – mortgages, said: 'These latest reductions bring five-year and two-year fixed rates closer together.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mirror
2 hours ago
- Daily Mirror
Rachel Reeves pledges £39bn to build thousands of affordable homes for Brits
Chancellor Rachel Reeves will announce plans to spend £39billion on a new affordable homes programme over the next decade as part of her long-awaited Spending Review Hundreds of thousands of new affordable homes will be built over the next decade under a £39billion package announced today. Rachel Reeves will unveil a massive cash injection for affordable homes to 'turn the tide on the housing crisis'. It comes as the Government pushes to meet its pledge to build 1.5 million homes by the next election. Campaigners said the plan was 'transformational' and could help reverse decades of neglect. The Chancellor will make the commitment in the Spending Review as she promises to "invest in Britain's renewal". The funding for a new Affordable Homes Programme far exceeds the amount previously committed by the Tories. The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026. READ MORE: Rachel Reeves gives major update on £3 price cap for bus fares A Government source said: 'The Government is investing in Britain's renewal, so working people are better off. "We're turning the tide against the unacceptable housing crisis in this country with the biggest boost to social and affordable housing investment in a generation, delivering on our Plan for Change commitment to get Britain building.' Mairi MacRae, Director of Campaigns and Policy at Shelter, said: 'This increased investment is a watershed moment in tackling the housing emergency. It's a huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country." Kate Henderson, Chief Executive of the National Housing Federation, said: 'This is a transformation package for social housing and will deliver the right conditions for a decade of renewal and growth. 'This is the most ambitious Affordable Homes Programme in decades and alongside long-term certainty on rents, will kickstart a generational boost in the delivery of new social homes.' It comes on top of a ten-year social rent settlement that will set a rent policy for social housing from 2026 that enables providers to borrow and invest in new and existing homes, while also protecting social housing tenants. It will see rents rise at CPI inflation + 1% from 2026. There are 1.3 million households stuck on social housing waiting lists in England, a rise of 10% in the last two years. Some 20,560 social homes were lost in 2023/24, primarily through Right to Buy sales and demolitions, while 19,910 were delivered - meaning a loss of 650 social homes. Shelter has called for 90,000 social rent homes to be built per year over the next decade to clear the backlog. It comes as the Chancellor will today lay out plans to splash tens of billions of pounds on public services such as the NHS, defence and schools over the next three years. But other areas are expected to feel the squeeze. The Institute for Fiscal Studies has warned that any increase in NHS funding above 2.5% raises the risk of real-terms cuts for other departments or further tax rises in the autumn. Ms Reeves will allocated around £113billion for infrastructure investment, including big ticket items like the affordable homes plan, transport and energy projects. She freed up the funding last year by loosening borrowing rules. She will also confirm changes to Treasury rules to make it easier to pour cash into projects outside of London and the South East. Value-for-money rules usually favour investment in prosperous areas as having the biggest impact on growth, making it harder to approve big projects in parts of the North and the Midlands. The Chancellor is expected to say: 'This Government is renewing Britain. But I know too many people in too many parts of the country are yet to feel it. This Government's task – my task – and the purpose of this Spending Review – is to change that. To ensure that renewal is felt in people's everyday lives, their jobs, their communities." A blitz of announcements made ahead of time include around £15.6 billion of spending on public transport outside of London and the South East, and £16.7 billion for nuclear power, most of which will pay for the new Sizewell C plant in Suffolk. Ms Reeves also confirmed on Monday that some 9 million pensioners would be eligible for the winter fuel allowance this year after backtracking on the unpopular decision to strip the benefit from all but the poorest OAPs. The Government also announced plans to expand free school meals eligibility to another 500,000 children whose families get Universal Credit, in a major win for the Mirror's campaign to end hunger in classrooms.
Reuters
3 hours ago
- Reuters
Brazil bank chiefs balk at tax hike proposal, urge spending review
SAO PAULO, June 10 (Reuters) - The chief executives of some of Brazil's largest banks on Tuesday expressed concerns over government plans to raise taxes to meet the federal fiscal target, advocating instead for a review of public spending. The proposed fiscal measures, which President Luiz Inacio Lula da Silva has yet to formally receive, include higher taxes on online betting, private credit instruments and financial institutions, while trimming a tax hike on the IOF financial transaction tax. The government raised the IOF tax last month by decree, sparking backlash from Congress and the market. Roberto Sallouti, CEO of investment bank BTG Pactual , said at an event hosted by banking federation Febraban in Sao Paulo that focusing on spending efficiency would be preferable to tax increases, which he argued would harm economic growth. "Isn't it time to seek greater efficiency in Brazil's public budget spending?" Sallouti said, warning that increasing taxes would increase the cost of doing business in the nation. Lula's administration has so far avoided putting spending cuts on the agenda and defended allocations toward sweeping benefits programs. Marcelo Noronha, CEO of lender Bradesco , told the same panel that fiscal balance should be achieved through expenditure cuts, not revenue increases, and called for dialogue with policymakers. Santander Brasil CEO Mario Leao acknowledged the difficulty of such decisions but stressed their necessity. "No one wakes up wanting to pay more in taxes, no one wakes up wanting to manage spending proactively, but these are agendas that Brazil has to face," Leao said.
The Guardian
5 hours ago
- The Guardian
Britons ‘hoarding cash amid economic uncertainty and fear of outages'
Britons are hoarding physical cash amid extreme economic uncertainty and to provide a safety net for possible banking system outages such as the recent one in Spain, according to the Bank of England's chief cashier. Victoria Cleland said on Tuesday that UK households were building a cash contingency pot, much as they did during the Covid and cost of living crises. She said the Bank had tracked a significant increase in the number of banknotes in circulation in recent months, continuing a rising trend since 2022, at a time when the volume of cash transactions has 'gone down significantly'. In comments at the Cash in the UK conference, Cleland said cash hoarding suggested households were responding to a more volatile global backdrop after the pandemic, the war in Ukraine and the trade uncertainty sparked by Donald Trump's tariffs, Bloomberg reported. Data collected by the Bank suggests the value of banknotes in circulation has jumped 23% since before the pandemic, even at a time when the use of cash has dropped. UK Finance data shows cash was used in just over half of all transactions in 2013 but this had collapsed to 12% by 2023 after a 7% year-on-year fall in the use of cash. However, in the past couple of years high-street banks and building societies have reported a strong rise in demand from customers for cash. Earlier this year Nationwide said it had seen a 10% increase in ATM withdrawals in 2024 from 2023. Britain's biggest building society said many of its customers were using cash to help them with weekly budgeting during the period of high inflation. Consumers in Spain and Portugal also turned to cash to buy goods during the power outage in late April that knocked out bank and payment systems, while cyber-attacks on UK businesses and organisations in recent months have undermined faith in electronic transactions. 'At a time of uncertainty, at a time of crisis, people do move to cash. They want to make sure they have literally got something under the mattress,' Cleland said. 'Even in the UK, there will be times where networks are down and you can only be paying in cash.' Cash began to decline as the favourite form of money in 2014 and by 2017 Bank of England data shows debit cards had overtaken cash as the most frequently used payment method. The trend began to reverse in 2022 as inflation began to rise after Russia's invasion of Ukraine. The refusal of many shops to accept notes and coins have prompted campaigners and politicians to call for a law forcing force retailers to accept them. Cleland said that consumers want cash 'to be there but they're not necessarily using it'. She added that households in financial difficulties also used it for budgeting, with reports of increased use among those hit hard by high inflation.
