Santander confirms more cuts to mortgage rates but interest rates ‘unlikely to move for few months’

Last week, Santander cut interest rates across multiple fixed-rate products which benefited first-time homebuyers.

The Bank of England opted to hold the base rate at 5.25 per cent earlier this month, but signalled cuts could be coming later in the year.

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Following Santander’s latest update, the residential interest rate changes from the lender include:

• 60 per cent LTV two-year fixed rate, remortgage only with a £999 fee is now priced at 4.39 per cent, down from 4.49 per cent
• 60 per cent LTV three-year fixed rate, remortgage only with a £999 fee is now priced at 4.39 per cent, down from 4.44 per cent
• 60 per cent LTV five-year fixed rate remortgage only with £0 fee is now priced at 4.19 per cent, down from 4.24 per cent
• 75 per ecnt LTV two-year fixed rate, remortgage only with a £999 fee is now priced at 4.53 per cent, down from 4.69 per cent.

Here are some examples of the buy-to-let products which have been reduced by Santander as of today:

• 60 per cent LTV two-year fixed rate for purchase and remortgage with a £1749 fee is now priced at 4.49 per cent, down from 4.64 per cent
• 60 per cent LTV five-year fixed rate for purchase and remortgage with £1749 fee is now priced at 4.25 per cent, down from 4.40 per cent
• 75 per cent LTV two-year fixed rate, for purchase and remortgage with £0 fee is now priced at 5.28 per cent, down from 5.38 per cent
• 75 per cent LTV five-year fixed rate, for purchase and remortgage with £0 fee is now priced at 4.77 per cent, down from 4.87 per cent.

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Rachel Springall, a finance expert at Moneyfacts, highlighted that Britons will need to wait a bit longer before mortgage rates are cut more significantly.

She explained: “The recent observations made by the Bank of England would suggest base rate is unlikely to move for a few months yet, and indeed the Monetary Policy Committee will wait for firm evidence that inflation is under control before even considering a rate cut.

“Borrowers who are sitting on their Standard Variable Rate (SVR) should be incentivised to switch their mortgage if they can, as it’s unlikely they will see their repayments drop for the foreseeable.

“Indeed, the average two- and five-year fixed rates are much lower than the average SVR. Seeking advice from an independent broker is wise to work out if an individual could save a decent sum on their monthly repayments by changing their mortgage deal.”