Santander mortgage rise

Hundreds of thousands of Santander mortgage customers face an increase in their payments from October after the bank announced it was planning a rise in its Standard Variable Rate, or SVR, of half a percentage point.

The rate will move up from 4.24% to 4.74%, resulting in an average increase of £26 per month for a £100,000 mortgage

Santander said it was writing to mortgage customers to tell them about the change, which it intends to implement from 3rd October.

It explained that for the last three years the amount it costs to provide mortgages and the rates offered to savings customers have been increasing despite the Bank of England's base rate remaining static

Santander will also be writing to large numbers of borrowers who are currently on fixed rates or trackers which will revert to SVR over time. However, customers with Alliance & Leicester branded mortgages and paying SVR are not affected.

The increase follows similar moves this year from the Co-op Bank, Halifax, Bank of Ireland and the Yorkshire and Clydesdale banks.

Co-op blames canny savers for mortgage hike

Savers looking for high-paying fixed rate deals are pushing up the cost of mortgages.

That's what the Co-operative Bank says after announcing a half per cent jump in its Standard Variable Rate (SVR) for 54,000 mortgage borrowers.

The Co-op isn't the first to push up SVR. Halifax and Bank of Ireland set this ball rolling a few weeks ago.

Several have blamed the rising cost of raising money from savers and international lenders to fund their mortgages.

Now Co-op Bank says canny savers looking for high fixed rate accounts are driving the increase.

A spokesman said its mortgages are "predominantly funded through our retail savings".


And that they "are increasingly seeing a trend for savers to opt for longer term, fixed rate savings products, which typically pay higher rates of interest".

The "knock-on effect" is that mortgage interest rates have to go up.

The Co-op's variable interest rate on its Cash ISA is just 0.5%. In contrast, it offers a 2.49% fixed interest rate for one year deposits and 3.29% for 3 years.

The SVR for mortgage borrowers is being raised from 4.24% to to 4.74%.