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Santander cuts rates on mortgages

Dominic Welling dominic.welling@consumerchoices.co.uk

Santander is offering market-leading fixed-rate mortgages – but you’ll still need a big deposit.

Santander (www.santander.co.uk), which has a fifth of the UK’s mortgage market, has cut rates on a slew of its fixed mortgages.

By trimming the rates, its mortgages now lead the best-buy tables in some categories.

Changes to the fixed rate mortgage range include:

• A two-year fixed reduced to 2.75% from 2.85%. A minimum 40% deposit is needed and there is a £1995 fee
• A four-year fixed reduced to 4.75% from 4.99%. A minimum 25% deposit is needed and there is a £995 fee
• A five-year fixed reduced to 4.75% from 4.99%. A minimum 30% deposit is needed and there is a £995 fee.

A Santander spokesperson said: "It's great news for borrowers that rates are coming down on fixed deals, whether they’re looking to remortgage or purchase a house.”

Santander has also launched two new products:

• A two-year fixed at 3.90% for people with at least a 25% deposit
• A two-year tracker at 3.09% for people with a minimum 30% deposit.

Chris Eagle, director of marketing at Creditchoices.co.uk, said: “Many of the UK’s big mortgage lenders have trimmed rates on fixed mortgages in recent weeks.

“There are two reasons for this. Some, like Santander want to grow their market share and many have found their own funding costs are going down, due to price changes in the money markets.

“Nevertheless, the banks are still pricing mortgages at relatively high levels, compared to the 0.5% base rate.”