However, brokers said the change was unlikely to be the first step in a wave of big price increases.
They announced a small increase to some of its fixed-rate products, starting today, January 24.
The bank says it is increasing all fixed-rate deals for home buyers and those remortgaging.
It is also withdrawing all its exclusive first-time buyer fixed rate deals, as well as a three-year fixed rate product for home buyers with a 10 percent deposit.
The rate hike may come as a shock to many as Santander just announced rate cuts last week.
It reduced its lowest two-year fixed rate from 4.55 percent to 4.1 percent, which became an instant best-buy.
The increase today represents a shift away from the mortgage price war in recent weeks, which saw more than 50 lenders lower residential rates, since January 1.
Lewis Shaw, Owner and Mortgage Expert at Shaw Financial Services said: “Some rate increases were always on the cards, and we’ve been trying to warn of this over the past two weeks after swaps and gilt yields rose in response to the double whammy of higher-than-expected inflation numbers and the developing conflict in the Red Sea.
“Until we have more positive economic data showing inflation cooling and the conflict in the Middle East finds a solution, the rate war is, by and large, finished.
“This year’s mantra for prospective buyers or those needing to renew is don’t count your chickens. We are not yet out of the woods, and black swans are seemingly becoming more frequent.”
Ben Perks, Managing Director at Orchard Financial Advisers said: “The constant rate reduction announcements we were enjoying were destined to stop at some point.
“Swap rates have increased slightly this week, which could be a factor, but hopefully this is just Santander ‘turning the tap off’ because they priced so competitively last week and have seen an influx of applications. We will see some ups and downs over the coming weeks so borrowers shouldn’t be overly concerned.”
Following the rise in inflation, experts began warning that mortgage rates were about to stop falling.
The four percent inflation figure for December came in slightly higher than the 3.8 percent that markets had forecast.
This led to financial markets rolling back slightly on their forecasts for base rate cuts this year.
Will other lenders start to increase rates?
Rohit Kohli, Director at The Mortgage Stop said: “We are going to see some ups and downs over the coming months from lenders so these kinds of minor setbacks are inevitable.
“Inflation rose unexpectedly, if only marginally last week, giving lenders pause for thought but a day or two later the retail sales data for December was published and was dreadful, which will highlight the fragility of the economy to the Bank of England.
“The one positive to take out of it all is that lenders are fighting to lend money after a poor 2023 but how long it lasts is anyone’s guess.”
