On Tuesday, March 21st, Santander Bank will introduce rate reductions across its residential mortgage ranges, as well as a new 5-year fixed-rate mortgage product.
The bank’s new business fixed rates will be reduced by up to 0.28%, while selected tracker rates will see reductions of up to 0.34%.
Additionally, Santander will launch a new 5-year purchase fixed rate at 3.99% with a 60% loan-to-value (LTV) ratio and a £999 fee.
This rate will be the lowest on-sale fixed rate currently offered by the bank, alongside the existing remortgage version.
Simultaneously, the 60% LTV 5-year fixed rate with no fee will be withdrawn from the market. For product transfers, selected residential fixed rates will decrease by up to 0.11%. However, there will be no changes to any buy-to-let rates.
As part of its monthly housekeeping, Santander will roll on charge and benefit end dates by one month. Completion deadlines have been updated to August 5th, 2023, for product transfers, September 29th, 2023, for purchases, and October 6th, 2023, for remortgages.
Furthermore, product codes will be replaced across the new business and product transfer range.
Reaction
Scott Taylor-Barr, financial adviser at Carl Summers Financial Services:
“We have seen several lenders increasing rates, albeit by small amounts, over the previous week or so, now we could well see many of those increases reversed in the coming week, depending on how the current banking wobble pans out.
“From a borrower’s point of view it can feel very daunting with all these rate changes. But what can seem a relatively large move as a percentage can be less intimidating when worked out into the actual pounds and pence change on your own mortgage.
“It’s also worth remembering that you are buying a home, yours or someone else’s, so don’t get too caught up in interest rates, think about the other, more controllable, aspects: fixed rate or not, shorter or longer term deal, what repayment term, what are the fees?”
Matthew Jackson, director at Mint FS:
“Hopefully this will be the start of seeing more and more lenders offering sub-4% fixed rates. I suspect that it is more and more likely that the Bank of England base rate will be held this month, and this will kick off some aggressive pricing from lenders. Good news for mortgage customers at last.”
Justin Moy, managing director at EHF Mortgages:
“Putting us back to the interest rates we saw at the end of February, Santander is the first of a number of lenders who will adjust their rates this week, with Halifax making a start last week. Most of us will have eyes on the Bank of England for their base rate analysis later this week, which will be the headline stealer for the week.”
Imran Hussain, director at Harmony Financial Services:
“I hope this is the start of a move in a positive direction from other lenders but I think a lot will also depend on the markets and what the Bank of England does with the base rate this week.”
Graham Cox, director at SelfEmployedMortgageHub.com:
“UK swap rates, which lenders’ fixed-rated deals are based on, have been falling for a week or two now. And they continue to fall this morning as the expectation is, given the current market conditions, central banks will apply the brakes on base rate rises. This is excellent news for mortgage borrowers.”
Lewis Shaw, owner and mortgage broker at Riverside Mortgages:
“This is a positive move by Santander, presumably as they want to hit some lending targets as they’ve been off the boil for quite some time. Will it spur other lenders to reduce, only time will tell? However, as always, we urge caution, especially with so much volatility in the mortgage market, so don’t make any hasty decisions.”
Gareth Davies, director at South Coast Mortgage Services:
“This was good news to see on a Monday morning and hopefully more will follow. I’d say it’s rare for Santander to source top for too long, so maybe they’ll either whip these away pronto or perhaps some other major lenders can make more cuts this week, too. The reductions in swap rates in the past seven days mean that there is a good possibility of more reductions in the short term.”
James Vince, managing director at Castle View Finance:
“It’s great to see another High Street lender offering a sub-4% rate. This will suit those that have chosen to wait it out on an SVR or Tracker to make the switch to a reasonable 5-year product with a fair product fee.”
