Santander becomes the latest bank to pull ALL of its mortgage deals for new customers

Santander has become the latest bank to close its slew of mortgage offers to new customers as rising interest rates continue to wreak havoc on the housing market.

The well-known lender was forced today to suspend rates on new homes and buy-to-let offers after it was inundated with applications from borrowers desperate for refinancing.

It comes after HSBC last week took emergency action to withdraw its new customer mortgage deals, launching them 0.45 percentage points higher. Until yesterday, Santander was the only major lender that had not revised its mortgage offer. It has now said no new deals will be available until Wednesday.

Dominik Lipnicki, broker at Your Mortgage Decisions, warned, “We’re not even at the beginning of the end. Lenders don’t want to be overwhelmed, so if one pulls out, others will follow. I don’t think this is the last product withdrawal we’ll see this week.”

Lenders have been in a race to raise rates since May 24, when official figures showed that inflation, at 8.7 percent, is still higher than forecast.

Hundreds of home loans have been taken up by banks and building societies in recent weeks. As of today, NatWest increased rates on its residential two- and five-year deals by 0.2 percentage points and First Direct increased its fixed income deals by up to 0.49 percent today.

Rob Gill, from Altura Mortgage Finance, said: ‘What started with smaller lenders dramatically pulling out of the market has now spread to much larger lenders, with Nationwide, HSBC and more recently Santander.

Lenders are still managing volumes and recovering from some very challenging market conditions.”