The bank said the change will come into effect in early October and will see those with SVR mortgages with an average increase of £26 a month or £312 a year for a £100,000 mortgage.
There are more than 400,000 Santander customers paying the standard variable rate.
Michael Ossei, personal finance expert at uSwitch.com, says:
"This news is another blow to homeowners and follows a raft of other lenders who have also hiked their SVR rates this year. Many people are already seeing their finances and household budgets stretched, and with winter approaching some Santander mortgage customers may feel left out in the cold.
"The lowest SVR on the market is 3.69% - so Santander is someway off the top of the table, but with the highest rate of 5.99% it's by no means offering the worst deal to mortgage customers. But considering that the base rate is just 0.5% still, the majority of homeowners may feel they are being unfairly treated by their mortgage provider.
"This latest increase should serve as a warning that mortgage payments could go up at any time and with very little notice. If you are enjoying lower mortgage payments at the moment it may be worth overpaying, or putting aside the extra cash you're saving while rates are so low. And although it may be another year or more before the base rate rises, the only way for mortgage rates to go in the long term is up.
"Although fixed deals tend to come with a higher rate, borrowers looking for peace of mind could protect themselves against rises by moving to a fixed plan such from Post Office's 5 year fixed deal at 3.59% with no fees. Natwest's 5 year fixed deal has a competitive rate of 2.99%, but comes with a huge fee of £2,495.
"Unfortunately the best fixed plan on the market has recently been pulled, so consumers should act quickly or risk losing out. However, any homeowners worried about their mortgage payments should make sure they do their homework to make sure they get the best deal possible to suit their needs."
Clare Francis, mortgage expert at MoneySupermarket.com said:
"This is yet another blow for mortgage borrowers as Santander joins the list of lenders to hike its SVR. Despite the fact the Bank of England base rate has remained unchanged since March 2009 SVRs have been edging upwards. In the last few months Halifax, Co-operative Bank, Bank of Ireland and Yorkshire and Clydesdale Bank have increased their SVR, with Santander now following suit announcing that its SVR will rise by 0.5 per cent from 4.24 per cent to 4.74 per cent from 3 October.
"A Santander customer on its SVR rate with a £150,000 25-year repayment mortgage will see their payments increase by £42.54 a month; a significant amount for the many households who will be impacted by this. Anyone affected by this or who is concerned their mortgage lender may join the SVR-hiking pack should consider remortgaging onto another deal if possible. If you are happy to stick with a variable rate then go for a tracker rather than a discount as trackers move in line with the Bank of England base rate. Speak to an independent mortgage broker if you are unsure of the best option as they will explain what is available to you and help to make the best decision for your situation."
