Santander announces another cut to mortgage interest rates after Bank of England decision

Last week, the Bank of England opted to hold the country’s base rate at 5.25 per cent once again as it attempts to rein in inflation.

Mortgage holders have been saddled with soaring repayments over the last year due to high interest rates but economists are betting on a significant rate cut from the central bank later in the year.

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As of today, the new interest rate changes to Santander’s line of fixed rate mortgage products will include:

• 60 per cent LTV two-year fixed rate residential purchase mortgage with a £999 product fee is now priced at 4.20 per cent, down from 4.25 per cent
• 75 per cent LTV two-year fixed rate residential purchase mortgage with a £999 product fee is now priced at 4.30 per cent, down from 4.35 per cent
• 90 per cent LTV two-year fixed rate residential purchase mortgage with a £999 product fee is now priced at 4.89 per cent, down from 4.94 per cent.

Furthermore, here is an example of the rate reductions being implemented across Santander’s line of five-year fixed rate mortgages:

• 60 per cent LTV five year fixed rate residential purchase mortgage with a £999 purchase fee is now priced at 3.94 per cent, down from 4.04 per cent
• 75 per cent LTV five year fixed rate residential purchase mortgage with a £999 purchase fee is now priced at 4.14 per cent, down from 4.24 per cent
• 90 per cent LTV five year fixed rate residential purchase mortgage with no purchase fee is now priced at 4.64 per cent, down from 4.84 per cent.

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Despite the recent trend of mortgage lenders slashing interest rates, experts have cautioned Britons on trying to get on the property ladder too early ahead of a potential Bank of England base rate cut.

Michael Dinich, a personal finance expert at Wealth of Geeks, explained: “Your major indicator to consider acting on your house-buying plans is when the Bank of England does decide to lower the rates, which may happen as soon as this summer.

“So it is wise to have a solid plan ready for when that day comes. A financial advisor or broker will be able to tell you exactly when the right time for you is, based on your personal circumstances.”

The central bank’s Monetary Policy Committee (MPC) will next meet to discuss potential changes to interest rates on March 21, 2024.