Hundreds of thousands of Santander mortgage customers will be hit with a hefty rate hike – and the threat of much worse to come.
The Spanish-owned bank announced it would increase its standard variable rate (SVR) from 4.24% to 4.74% on October 3.
Someone with a £150,000 mortgage would see their payments rocket by £516 over the next year.
Santander is also changing its rules to allow it to increase its SVR even more.
The firm will whack up its “SVR cap margin” – the maximum amount above the Bank of England’s base rate it can charge – from 3.75% to 4.99% from September 24.
It will mean Santander has the power to increase its SVR to 5.49%. If it does, someone with a £150,000 mortgage could see their monthly payment leap by £110 a month.
There is now a fear other banks will follow suit. A wave of lenders, including Halifax, Clydesdale and Yorkshire Banks, and the Co-operative, increased their SVR earlier this year.
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