A major UK bank has become the latest lender to slash its mortgage rates. It comes during a time when swap rates, which fixed-rate mortgages are priced off, are continuing to fall.
Santander has reduced its two-year, three-year, and five-year fixed rate mortgages at 85%, 90% and 95% loan-to-value (LTV) by up to 0.32%, with brokers claiming that the move reflects an “increasingly aggressive” strategy as lenders seek to ignite the market. Richard Davidson, mortgage advisor at onlinemortgageadvisor.co.uk, said: “Santander’s larger reductions for first-time buyers align with their increasingly aggressive strategy in this space, as we’ve seen with their recent move into 98% LTV mortgages. They’re clearly looking to make a big mark this year and potentially undercut some of the other big lenders.
“The modest increases elsewhere in their portfolio are more an indication of where Santander wants to focus their firepower this year, rather than any signal on the direction of rates more generally.”
Branding the five-year 98% LTV as ‘My First Mortgage’ deal, Santander also includes a rate of 5.19%, zero product fee and £250 cashback.
The offer is exclusively to first-time buyers through a Santander mortgage adviser or mortgage broker, marking the bank’s aim to help more people get onto the property ladder.
David Morris, head of homes for Santander UK, said: “We know that saving for a deposit remains one of the biggest hurdles to homeownership.
“Last year, the average first-time buyer with Santander put down a deposit of more than £85,0003, a figure that can feel unattainable for today’s aspiring homeowners, whether that’s a result of more modest income, limited family financial support, rising rental costs, and in some cases childcare expenses.”
“We want to help more people benefit from the stability and sense of pride that owning a home brings, while maintaining our position as a responsible lender.”
The lender has also reduced other fixed rates by up to 0.08%, while some home mover and remortgage products at lower LTVs have been increased marginally, which, according to experts, is a strategic refocus rather than a signal of where rates are heading.
Experts, however, hope that a fall in inflation could mean more and more people benefit from further rate cuts this month.
