Santander hikes mortgage rates while others cut prices

In the UK, mortgage lenders are currently adjusting their rates in response to shifts in the Bank of England's Bank Rate. On September 19, 2025, Santander announced an increase in the cost of certain fixed-rate mortgage deals, affecting both residential and buy-to-let borrowers by up to 0.1 percentage points. This is notable in a climate where other lenders, including Halifax and TSB, have begun reducing their rates, showcasing a competitive market. Halifax has opted to increase the cost of selected fixed-rate mortgages by 0.05 percentage points while simultaneously cutting other two-year deals to provide incentives for borrowers considering lower loan-to-value ratios. In recent months, the mortgage market has reacted to the Bank of England's decisions, notably the reduction of the Bank Rate from 4.25% to 4% on August 7, which has instilled some cautious optimism among lenders. The trend of several major lenders lowering fixed-rate pricing is partially attributed to confidence stemming from this decision. Competitive actions among lenders, however, are closely tied to market stability and indicators such as inflation and employment data. Experts predict that prospective Bank Rate cuts later this year could further affect mortgage rates, presenting a mixed bag for consumers assessing their borrowing options. Lenders have historically made pricing adjustments to stay competitive in a fluctuating market. For instance, Halifax, with its recent hikes and cuts, hopes to entice both new home buyers and existing customers looking to remortgage. In particular, Santander has also made cuts in their products aiming for those making first-time purchases, offering two- and five-year fixed rates depending on deposit size. This strategy suggests a keen focus on maintaining market share amid rising costs felt across various economic sectors. As competition intensifies, borrowers have more options to choose from, but this can also lead to confusion regarding the best time to secure a mortgage deal. While some lenders have increased rates, others are offering competitive cuts as they await further economic signals, particularly concerning inflation and potential further interest rate cuts from the Bank of England. In consideration of these fluctuations, prospective borrowers must remain vigilant about the changing landscape of mortgage products available to them as they navigate their options.