Santander has announced a new round of mortgage rate cuts, becoming the latest major bank to adjust its rates. From tomorrow, the bank will reduce several fixed-rate deals for both new and existing borrowers. The reductions will be as much as 0.32 percentage points, offering potential savings for those looking to secure or renew their mortgages.

This move by Santander follows similar actions by other major banks. Earlier this week, HSBC, Barclays, and NatWest also lowered their mortgage rates, reflecting a broader trend among lenders to adjust their offerings in response to market conditions.

The recent cuts come at a time when borrowers are closely monitoring rate changes to find the best deals available. With multiple banks reducing rates, homeowners and prospective buyers have more options to consider, potentially improving affordability for those looking to enter the housing market or refinance their existing loans.

All three banks have recently reduced their home loan rates, bringing them back to levels last seen before Liz Truss became Prime Minister in September 2022. The lowest five-year fixed rate is now 3.77% from NatWest, while Halifax offers the lowest two-year fixed rate at 4.12%.

Attention will turn to Santander’s rate cuts tomorrow to see if they introduce any competitive new offers. 

Iain Swatton, director at Exemplar Financial Services, commented that Santander’s rate reductions, though slightly delayed compared to its competitors, are a positive development. These cuts should make mortgages more affordable and could boost activity in the mortgage market. Increased competition among lenders is expected to benefit borrowers by providing better options and potentially lowering monthly payments.

Santander has revealed plans to cut fixed mortgage rates by up to 0.27 percentage points for new customers, effective from tomorrow. This reduction applies to various fixed-rate deals, providing an opportunity for new borrowers to secure lower monthly payments. The move is part of a broader trend among lenders aiming to attract more customers by offering competitive rates.

For buyers and owners of new build properties, Santander is also reducing rates, though by a slightly lower margin of up to 0.25 percentage points. This adjustment is expected to make homeownership more affordable for those purchasing newly constructed homes, potentially encouraging more buyers to enter the market.

Landlords will not be left out of the benefits. Santander’s new rates include a reduction of up to 0.27 percentage points on fixed-rate deals for rental properties. This change is likely to provide relief for property investors, offering more attractive financing options as they manage their rental portfolios.

Current Santander mortgage holders could see their product transfer rates reduced by up to 0.32 percentage points starting tomorrow. This rate cut applies to those who choose to stay with Santander instead of switching to a new lender.

Landlords with mortgages from Santander will also benefit, as their product transfer rates will decrease by up to 0.23 percentage points. 

Product transfers allow borrowers to switch to a new rate without changing lenders. This option is popular among those refinancing their mortgages; last year, nearly 83 per cent of the 1.8 million people who refinanced chose to stay with their current lender, according to UK Finance.

The main advantage of a product transfer is that it involves less paperwork and avoids the need for a new affordability assessment or property re-valuation, although it might not always offer the best available deal.

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