Barclays and Santander bring in new mortgage rules which are 'bewildering'

Barclays and Santander have issued mortgage warnings to customers as new rules take effect. As we approach Christmas, Barclays has announced reductions of 0.2 of a percentage point across a number of new home loans, however Santander has pushed up the cost of several new deals by 0.18 percent.

Michelle Lawson, Director at Lawson Financial, said: “Welcome to mortgage market mayhem. Santander's announcement to raise rates after Barclays cut them earlier on Tuesday shows the radical flux in the mortgage market at present.

"Rates are going here, there and everywhere. The volatility shows that borrowers need to act and secure a rate and then let brokers monitor their mortgage for rate reductions." Ben Perks, Managing Director at Orchard Financial Advisers, said: “This is such a turbulent and unpredictable time for mortgage rates. The hope Barclays gave has been cruelly snatched away by Santander.”

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Director at Exemplar Financial Services, Iain Swatton, said: "Barclays cutting rates in the morning and Santander hiking theirs in the afternoon is the mortgage market equivalent of someone pouring you a cup of tea, only for the next person to take the biscuit away.

“While Barclays might be signalling optimism, Santander seems to be managing its popularity a little too well. For consumers, though, it’s a bewildering picture: are rates going up, down, or just playing a game of musical chairs?

“One thing’s for sure—navigating this market is as much about timing as it is about luck." Justin Moy, Managing Director at EHF Mortgages, said: “One high street lender cuts fixed rates, another increases them not long after.

“This may reflect several factors, such as whether a lender is looking for business or perhaps turning the taps off to catch up on slower admin. Ultimately it's a mixed message to borrowers who will be confused by such announcements, and just shows the true value of using a mortgage broker, as timing can be so important to secure the best rates. If Ken Dodd did mortgages..."