Santander UK is set to withdraw some of its sub-4% mortgage deals from the market today, just over a week after their launch, due to changing market conditions.

The bank informed brokers on Thursday that it will be removing its 3.99% five-year, fixed-rate mortgage products from sale at 10pm today (February 21) . This decision comes in the wake of an increase in five-year swap rates, which lenders use to price mortgages, over the past week.

As a result, a 60% loan-to-value, five-year, fixed-rate at 3.99% for home buyers and a similar deal for homeowners looking to remortgage will be withdrawn from sale. However, Santander will continue to offer two-year, fixed-rate mortgages at 3.99%, both to home buyers and those looking to re-mortgage, requiring a 40% deposit or equity.

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These sub-4% deals were introduced by Santander UK last Thursday. On Wednesday, mortgage experts suggested that deals below 4% may be short-lived, following stronger-than-expected inflation data.

The Office for National Statistics (ONS) revealed on Wednesday that the rate of Consumer Prices Index (CPI) inflation rose to 3% in January, up from 2.5% in December, surpassing analysts' prediction of a 2.8% increase. Despite the higher-than-expected inflation data, Santander maintains that its forecasts still point to further Bank of England base rate cuts this year.

David Hollingworth, associate director at L&C Mortgages, commented: "Yesterday's news of the increase in the rate of inflation meant that some of the lowest fixed mortgage rates on the market could be under threat."

"That hasn't taken long to feed through, and Santander has announced that it will be withdrawing its five-year fix at 3.99% at the end of tomorrow, citing an increase in market rates as the driver. Its two-year, 3.99% fixed rate will remain in place. Co-operative Bank has also announced that it will temporarily withdraw some of its fixed rates from close of play tomorrow.

"It's not all bad news. Barclays has managed to find room for improvement in its existing customer products and both Nationwide Building Society and Halifax have just announced their intent to cut rates. Although the movement in swap rates, which are a key indicator for fixed mortgage rates, has not been enormous, it does look to be enough to put some of the very lowest rates in peril.

"It's not a need for panic but borrowers that have been considering a new deal may want to reach a decision sooner rather than later in case of more movement in rates. The constant shift in mortgage rates can be frustrating but the good news is that the longer-term expectation for Bank of England base rate is that it will continue downwards as the year progresses. What we don't know is when it will next fall and how far."

Nationwide Building Society has announced that from Friday, it will slash rates by up to 0.33 percentage points, offering rates starting from 4.09%. The new rates feature a five-year, fixed-rate mortgage at 60% loan-to-value (LTV) with a £1,499 fee, now at a rate of 4.09% following a cut of 0.05 percentage points.

Carlo Pileggi, Nationwide's senior manager for mortgages, commented: "These latest reductions bring five-year and two-year fixed rates closer together."