Santander has announced today that from 3rd October, it intends to increase its Standard Variable Rate (SVR) for mortgage customers from 4.24% to 4.74%.
It is also increasing the cap on the margin that its SVR can be above the Bank of England Bank Rate. On 24th September, the margin will increase from 3.75% to 4.99% - this means that from that date, the SVR will not be able to go above 5.49%, based on the current Bank Rate of 0.5%.
On its website, Santander says that the reason it is considering increasing its SVR is, “because of the increased cost to Santander of raising the money which we lend to our customers, including what it costs us to provide you with your mortgage.”
This intended SVR hike follows similar moves earlier this year from lenders such as Halifax, ING Direct and Bank of Ireland which resulted in rising mortgage costs for over a million borrowers.
If you’re paying Santander’s SVR (or any other lender’s SVR for that matter), see how a mortgage rate rise could affect your finances with our rate change calculator.
If you’re a Santander mortgage customer, the lender has more information about the changes on its website here.