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Sub 4% mortgages are returning to the market, with Santander UK launching new deals tomorrow.
The bank has announced that from Thursday, borrowers will be able to apply for one of four new products as it launches a range of two- and five-year fixed-rate deals at 3.99%.
Borrowers wanting to access the sub 4% rates, which are available for a new property purchase or remortgage, will need a 40% deposit.
Santander is also making reductions of up to 0.4% on more than 80 other mortgages products from tomorrow.
The new deals include a 60% LTV (loan-to-value) two or five-year fixed rate at 3.99% for home buyers, with a £1,999 fee.
A 60% LTV two or five-year fixed rate at 3.99% is also available for homeowners looking to remortgage, with a £1,749 fee.
Other new deals include a buy-to-let home purchase mortgage at 65% LTV with a two-year fixed rate at 4.35% with a £1,749 fee or 4.89% with no fee.
David Morris, head of homes at Santander UK, commented: “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.”
The move follows a cut in the Bank of England base rate last week, from 4.75% to 4.5%, fuelling hopes that competition between lenders to chop mortgage rates could heat up.
Santander UK also said yesterday that had recorded a 130% increase in mortgage applications in the fourth quarter of 2024 compared with the corresponding period a year earlier, as some home-buyers sought to potentially save themselves thousands of pounds in stamp duty costs.
From April, stamp duty discounts will become less generous, with the “nil rate” band for first-time buyers reducing from £425,000 to £300,000 and other home-buyers seeing a reduction from £250,000 to £125,000.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “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.”
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