Santander has announced a series of rate reductions and product adjustments set to take effect on Wednesday, 10th January. These changes feature a sub-4% rate on a 5-year fixed mortgage and updates to buy-to-let and product transfer offerings.
For new business, Santander has reduced all standard residential fixed rates by between 0.17% and 0.82%.
This includes a 5-year fixed rate at 3.89% with a £999 product fee for remortgages and a 3.94% rate for purchases, both at 60% loan-to-value (LTV).
Further reductions have been made across new build exclusive fixed rates, large loan fixed rates, and all buy-to-let 2 and 5-year fixed rates.
On the product transfer front, Santander has decreased all residential fixed rates by between 0.04% and 0.82%.
“Additionally, buy-to-let 2 and 5-year fixed rates see reductions between 0.15% and 0.56%, with all 3-year fixed rates in this category being withdrawn.
Justin Moy, managing director at EHF Mortgages:
“It’s been a month since Santander last repriced, but they have come back with a bang. Some of the rate cuts were needed to remain competitive, but the headline sub-4% deals for both purchase and remortgage will have more appeal than the toffees in a tin of Quality Street. In particular, those on buy-to-let and needing product transfer rates will see potentially a lot of benefit from this reprice.”
Gary Bush, financial adviser at MortgageShop.com:
“Some great New Year’s news that Santander is offering a 3.89% fixed rate for five years. It will make UK mortgage account holders’ lives a lot easier if they are approaching a mortgage renewal date in the next 6 months. We are very happy that a High Street lender has rolled its sleeves up again and sent a salvo over the top, attacking competitors’ offerings. A retaliatory response to this move can be expected in the next few days and definitely by the end of the week. The consumer will be the winner.”
Charles Breen, founder at Montgomery Financial:
“Talk about wanting to make a splash! This is less the usual minuscule repricing we see from one of the big 6, but more like an earthquake!! They just have gone and blown the blooming doors off of their usual pricing structure. The key question is if this is just to drum up some publicity or if will it be the nature of travel for rates going forward. My gut feeling is that we are going to be seeing sub-4% as the new norm.”
Elliott Culley, director at Switch Mortgage Finance:
“Santander needed to react to other high street lenders’ rate cuts over the last week and these reductions will bring them in line with the more competitive products currently available to clients. Their headline rate is the 5-year deal at 60% LTV which will certainly be the envy of the other mortgage lenders.”
Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“Santander, notorious for keeping its rates high and late to the interest rate reduction party, unleashes a left hook of a 5-year fixed deal at 60% LTV and is leading the market for remortgage and purchase. There are even good reductions on their product transfers. They have certainly come out punching. Welcome, Santander, the lean, mean, rate-slashing machine. But can they keep it up? Will this be a flash knockdown or a sustained pummeling? Only time will tell. But one thing’s for sure: Santander’s in the driver’s seat now, dictating the pace and leaving the competition reeling.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“This is more like it. There is some genuine competition between lenders now, and a welcome relief for many mortgage holders that a number of deals now start with a 3 rather than 4s or 5s. Once a couple more of the big six join the party, we’ll be cooking on gas.”
Imran Hussain, director at Harmony Financial Services:
“Santander are back with a bang hotting up the rate war even more. It’s now over to the other lenders to see what they can do with pricing. This is a perfect opportunity for those looking to remortgage or move home with a large deposit — long may the rate war continue. Lender margins will be truly tested to get the best borrowers in 2024.”
Michelle Lawson, director at Lawson Financial:
“Lenders are coming into 2024 strongly as expected. Expect more falls to come as stability returns. This will hopefully further stimulate competition in the mortgage market, which in turn will boost the property market.”
Steven Hargreaves, mortgage and protection adviser at The Mortgage Co:
“It’s great to see Santander join the party. Their rates were looking quite unattractive, so they needed to do this. We still have a number of larger lenders to reduce rates, so watch this space. Hopefully, the latest round of rate drops will start to give confidence to all parts of the housing market. A fantastic start to 2024.”
Rohit Kohli, director at The Mortgage Stop:
“Santander have taken their time to follow suit with the rest of the high street but now that they have we have some strong products that will be attractive to many different types of borrowers. There are now a lot of lenders in this range and, hopefully, the reductions we’re seeing will continue into the rest of the month.”
Rob Gill, managing director at Altura Mortgage Finance:
“These cuts from Santander to deliver rates below 4% are another salvo in the ongoing rate war as lenders scramble for new business. As long as the inflation outlook continues to improve, the trend of falling mortgage rates that started last year will continue to gather pace.”
Ben Tadd, director at Lucra Mortgages:
“The rate war intensifies with Santander slashing rates significantly, and throwing their hat in the ring as the latest big lender to offer sub 4% fixed rates. 2024 has started as we expected off the back of the significant rate reduction milestones witnessed in December. Expect a domino effect as the rest of the market continues to play catch up, in a bid to hang on to market share to stay on track to hit their 2024 lending targets.”
James Bull, mortgage broker at JB Mortgages:
“Very happy to see more and more lenders reducing rates as we head into the new year. This has filtered through into a lot of press coverage as well. Hopefully this will translate to much-improved consumer confidence and a bump in house purchase transactions.”
Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management:
“There are now three lenders offering below 4% at lower LTVs, but only two of the big 6. It will be great when the rest follow suit and give borrowers more choice.”
Mike Staton, director at Staton Mortgages:
“This has always been on the cards with mainstream lenders who are now wanting to join the party. There now seems to be a sense of serenity in the mortgage market and lenders are optimistic about future reductions by the BOE. I expect to see rates of 2.8% by the end of 2024, I expect these to come with lender fees but I am confident this will happen after a reduction in the BOE base rate that I expect to see in May. However, customers should not be led to believe that rates are the be-all and end-all of a mortgage, these rates come with high fees, which may make this an expensive option, especially in the north of England where house prices are relatively low.”
Gareth Davies, director at South Coast Mortgage Services:
“A matter of minutes after Barclays announce their rate cuts, Santander jump on the bandwagon and steal the thunder. Better late than never by Santander, but a welcome sight. Now let’s see who else can join the sub 4% party. It’s all happening in here, surely they don’t want to miss out?!”
Ken James, director at Contractor Mortgage Services:
“Santander comes to the table at last with a fist-pumping rate reduction. They are looking to take a big slice of the pie for themselves, and this is starting to heat up with serious-looking rate reductions hitting the market from lots of different lenders. Activity is up and this will add fuel to the fire and help some clients make that decision to take action now rather than waiting till the summer. The big question has to be, will it last or is this just a flash-in-the-pan moment for rate reductions?”
