Homebuyers and homeowners looking to secure a mortgage at an attractive rate have reason to celebrate—sub-4% mortgage deals are making a comeback! Santander UK is set to launch a series of new mortgage products tomorrow, offering fixed rates as low as 3.99%.
New Mortgage Deals from Santander UK
From Thursday, borrowers will have access to four new mortgage products, featuring both two-year and five-year fixed-rate deals at 3.99%. These competitive rates are available for both new property purchases and remortgages, but there’s a catch—borrowers will need a 40% deposit to qualify.
In addition to these new offerings, Santander is also slashing rates on over 80 of its existing mortgage products by up to 0.4%, further expanding options for those looking to secure a better deal.
Breaking Down the New Mortgage Options
- For Homebuyers: A two- or five-year fixed-rate mortgage at 3.99% with a 60% loan-to-value (LTV) ratio, subject to a £1,999 fee.
- For Homeowners Remortgaging: The same two- or five-year fixed rate at 3.99%, with a slightly lower fee of £1,749.
- For Buy-to-Let Investors: A two-year fixed-rate mortgage at 4.35% with a 65% LTV and a £1,749 fee, or an option at 4.89% with no upfront fee.
David Morris, head of homes at Santander UK, shared his enthusiasm for the new offerings:
“We’re delighted to launch a range of new products, along with rate cuts on our existing range, that will make a difference to customers across every stage of the home-buying journey.”
Why Are Mortgage Rates Dropping?
This positive development follows last week’s Bank of England base rate reduction from 4.75% to 4.5%. With falling swap rates and increased lender competition, industry experts believe we could see further mortgage rate cuts in the near future.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, commented:
“It was only a matter of time for lenders to bring back sub-4% mortgages as a result of swap rates falling in recent weeks, coupled with a cut to bank base rate. This is a positive injection to the mortgage market, and when a big lender makes such a move, it can prompt its peers to follow suit with cuts of their own.”
Increased Demand for Mortgages
The mortgage market has already seen a surge in demand, with Santander UK reporting a 130% increase in mortgage applications in the final quarter of 2024 compared to the same period in 2023. One key driver of this rush? Impending stamp duty changes set to take effect in April 2025.
From April, the “nil rate” band for first-time buyers will be reduced from £425,000 to £300,000, while the threshold for other homebuyers will drop from £250,000 to £125,000. This shift means that buyers are hurrying to secure their property purchases before they face potentially higher tax bills.
What This Means for Borrowers
With major lenders like Santander bringing back sub-4% rates, this could mark the beginning of a broader trend in the mortgage market. Whether you’re a first-time buyer, looking to remortgage, or investing in buy-to-let properties, now might be the perfect time to explore your mortgage options and secure a competitive rate before market conditions change.
Looking for advice on securing the best mortgage deal? Get in touch with Acen Properties today, and let’s find the right option for you!
