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NatWest and Santander latest lenders to increase five-year fixed rates

  • 03/02/2014
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NatWest and Santander latest lenders to increase five-year fixed rates
NatWest and Santander have both announced increases in medium-term fixed rates following a spike in the cost of five-year swap rates.

Santander has increased its 70% LTV five-year fix to 3.09%, its 75% LTV product to 3.29% and the 80% LTV mortgage to 3.79%. All three come with a £995 fee.

A trio of the lender’s three-year fixes have also increased by 10bps.

NatWest has also increased a pair of its five-year residential rates. Its 60% LTV product has jumped to 2.95% from 2.88% for customers paying a £995 product fee and risen from 3.19% to 3.25% for those fee-free.

The price of five-year swaps has remained high since spiking at 2.19% on December 27 and pushed through the 2% mark again on January 22. At the close of play on Friday five-year swaps were priced at 1.97%.

These rates are typically 1% higher than April 2013 and this had already prompted other lenders to alter mortgage pricing.

Barclays increased some of its five-year fixed rate products at the end of January while other lenders including Yorkshire BS, Norwich & Peterborough BS and Chelsea BS have also raised rates in this on medium-term mortgages.

A Santander for Intermediaries spokesperson said the changes were down to market conditions: “Santander regularly reviews its mortgage range to ensure competitive positioning in the market.

“In line with market conditions we have re-priced a selection of three and five-year fixed products. We believe these products remain competitive and offer homeowners good value for money.”

Mark Bullard, head of sales at NatWest Intermediary Solutions added: “These changes enable us to achieve a good balance of business in terms of LTV and volume.”

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