Santander will pull its five-year fixed rate business and product transfers at 3.99% for intermediary and direct borrowers a week after they were launched.
The withdrawal will come at 10pm on Friday 21 February, with the move coming after “a recent increase in five-year market swap rates,” the high street bank says in a note to brokers.
The lender introduced the sub-4% rate, at two- and five-year terms, on 13 February. The two-year term is unaffected.
The bank says its withdrawals cover:
New business
- 60% LTV five-year fixes at 3.99%, with a £1,749 fee remortgage
- 60% LTV five-year fixes at 3.99% with a £1,999 fee purchase
Product transfers
- 60% and 75% LTV five-year fixes at 3.99%, with a £1,749 fee
Trinity Financial product and communications director Aaron Strutt says: “Santander has been receiving a huge amount of applications for its sub-4% rates and given the rise in funding costs over the last couple of days, it was only a matter of time until the bank was going to withdraw some of its products.
“Santander is keeping its 3.99% two-year fix and Barclays still has the 3.99% five-year rate although they may not be around much longer.
“There is still time to secure Santander’s best buy deal but borrowers will need to be quick.”
Five-year Sonia swap rates were 3.93% on 18 February, down from 4.04 a month ago, according to Chatham Financial. Two-year swap rates were 4.02% down from 4.17% over the same period.
L&C Mortgages associate director David Hollingworth adds: “Yesterday’s news of the increase in the rate of inflation meant that some of the lowest fixed mortgage rates on the market could be under threat.
“That hasn’t taken long to feed through, and Santander has announced that it will be withdrawing its 5-year fix at 3.99% at the end of tomorrow, citing an increase in market rates as the driver. Its 2-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.
He points out: “It’s not all bad news. Barclays has managed to find room for improvement in its existing customer products and both Nationwide 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.
“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.”
