Santander has announced a wave of interest rate cuts on its mortgage products, which is a huge win for homeowners and homebuyers.
The major lender is reducing rates to selected fixed rates across its purchase, remortgage, buy-to-let and new build ranges.
In addition, Santander has announced the launch of a range of new two-year tracker products for large loans, with a loan-to-value (LTV) of up to 75 percent.
Homeowners negotiating a new deal and homebuyers hoping to get on the property ladder have struggled in recent years amid a challenging housing market.
Thanks to the Bank of England’s decision to increase the country’s base interest rate and keep it at 5.25 percent, mortgage repayments have increased in recent years.
Analysts are pricing in a rate cut sometime later this year, with lenders such as Santander taking action in anticipation.
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Here’s a full list of the mortgage rate cuts and changes Santander is making from today (June 11):
- New range of trackers for large loans with a term of 2 years for customers who buy and refinance. This includes a 60 per cent two-year LTV tracker rate of 6.04 per cent with a product fee of £1,999 for loans up to £5 million and a 75 per cent two-year LTV tracker rate of 6.24 per cent with a product fee of £ 1,999 for loans up to £3 million.
- Certain fixed residential interest rates will be reduced by 0.02 per cent to 0.14 per cent for purchases and remortgages, including a 60 per cent five-year LTV rate of 4.28 per cent on loans up to £3 million for purchases.
- The fixed rates for selected Buy to Let are reduced by 0.14 percent for purchases.
In addition to these cuts, Santander has also confirmed changes to product transfers when someone changes their current mortgage product to a new product with the same bank or building society.
For customers who wish to change or cancel their new mortgage agreement, the online transfer service allows them to choose a new product and a new offer will be issued if they have not yet accepted their original offer.
Once customers have accepted a new deal, they can switch to a new deal or cancel the deal booked for them
However, they must do this at least 14 days before their new deals take effect.
According to research by Moneyfactscompare, the average is fixed for two years mortgage Rates fluctuated by less than one percent over a seven-year period between April 2015 and April 2022, with five-year fixed deals also remaining stable over this period.
Furthermore, the average two-year fixed deal was below two percent in July 2022, but has since tripled to 6.84 percent in just three years as a result of the market’s reaction to the 2022 mini-budget.
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The high street lender is making changes to its mortgage offering
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James Hyde, a spokesperson for Moneyfactscompare, said: “Mortgage Interest rates may have fallen significantly from last year’s peak, but they remain much higher than they have typically been over the past fourteen years.
“Those coming to the end of a five-year term in June 2024 can expect their interest payments to almost double, with the average interest rate rising from 2.85 percent then to 5.5 percent now.
“If they want to commit for a shorter term to keep their future options open, interest rates will be even higher: the average two-year term is currently close to six percent.
“Savers are currently seeing at least real gains on their deposits, with easy access accounts having paid out an average of less than one per cent since May 2010 – despite the average inflation rate over the same period being over three per cent. “