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Santander mortgages cuts rate on five-year fix

Homebuyers can now fix their mortgage rate at 4.99% for five years with Santander, or take their chances with cheap tracker.

Spanish banking giant Santander has reduced the rates on its five-year fixed-rate mortgages, and is now offering the following:

• Homebuyers can fix at 4.99% for five years, up to 70% loan-to-value (LTV), with a £995 fee, and will get a free valuation and £250 cashback on completion
• Remortgagers can fix at 5.15% for five years, up to 70% LTV, with a £995 fee, and will get a free valuation and free legals.

The mortgages are available at Santander (previously Abbey) branches and Alliance & Leicester branches.

Phil Cliff, mortgage director for Santander, said: “Our research shows that customer demand for longer-term fixed rates has increased, and we’ve responded by reducing our rates.”

Santander’s research found that 59% of people planning to remortgage in the next six months would choose a fixed-rate deal, and almost half of these would choose a five-year fix.

However, for those who want to take their chances with a cheap tracker, Santander has also cut the rates on its three-year tracker mortgages. It is now offering rates as low as 2.54% (with a £995 fee) for homebuyers and 2.59% (with a £995 fee) for remortgagers.

Chris Eagle, commercial manager at Creditchoices.co.uk, advised: “When choosing between a tracker and a fixed-rate deal, there are a lot of factors to weigh up. We recommend that you contact a whole-of-market mortgage broker to discuss your options.”