Santander launches new two and five-year fixed-rate mortgages at 3.99%, sparking competition in the mortgage market. Barclays follows suit with new rates and fee reductions. The number of high LTV mortgage deals increases, offering more options for borrowers with smaller deposits.
Santander has announced the launch of a new range of mortgage deals, including two and five-year fixed-rate mortgages at 3.99% for homebuyers and remortgagers. These products are available at a 60% loan-to-value (LTV) ratio, requiring a 40% deposit. Borrowers will need to pay a fee of £1,999 for a purchase or £1,749 for a remortgage. The lender has also introduced a buy-to-let mortgage with a two-year fixed rate at 4.35% and a fee of £1,749 or 4.89% with no fee.
Santander's move follows the Bank of England's recent base rate cut from 4.75% to 4.5%, signaling a potential increase in competition among lenders to offer lower mortgage rates. David Hollingworth, associate director at L&C Mortgages, highlighted that these are the first standard rates from a high street lender to drop below 4% since last November. He emphasized that these deals are available to both buyers and remortgagers, indicating a positive shift in the mortgage market.Barclays has also announced plans to launch new mortgage rates across its fixed mortgage products starting tomorrow. To compete with Santander's offering, Barclays is introducing a 60% LTV five-year fixed-rate mortgage at 3.99% with a £899 fee, exclusively available to Premier bank account holders with an annual income of at least £75,000 or a minimum of £100,000 in savings. However, Barclays will also reduce rates on six homebuyer and remortgage products by up to 0.36%.The number of mortgage deals catering to borrowers with up to 95% loan-to-value (LTV) — requiring just a 5% deposit — has risen. Rachel Springall, finance expert at Moneyfactscompare.co.uk, noted that this growth in choice for mortgages with higher LTVs may encourage borrowers with limited deposits.While economists predict three further base rate cuts by the end of 2025, reaching a 4% base rate, this projection coincides with a revised inflation forecast
Mortgages Santander Barclays Interest Rates Loan-To-Value Base Rate Competition Housing Market
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