Santander has announced another round of mortgage rate reductions this week, with some product interest rates lowering as much as 0.2 percent.
This comes just one week after the bank’s last spate of rate cuts, which saw interest fall by between 0.05 and 0.29 percent on certain products.
The new rates have become live from Tuesday, August 22, and details respective to different loan values can be found here.
A statement on Santander’s website reads: “On Tuesday, August 22, we’re reducing residential and Buy to Let fixed rates across the new business and product transfer ranges.
“In the new business range, we’re introducing new first-time buyer (FTB) exclusives with £500 cashback and no product fee. We’re also introducing a new range of residential three-year fixed rates with no product fee, available to purchase and remortgage clients.”
READ MORE: Asking house prices plummet to lowest level since 2018
It added: “We’re replacing the 2.5-year fixed New Build range with new three-year fixed rate options. We’re launching new Buy to Let options with a £749 product fee for new business and product transfer clients, alongside the £0 and £1,749 product fee options subject to loan size.”
Commenting on the new rates on platform Newspage, Jamie Lennox, director at Dimora Mortgages said: “It’s great to see another Big Six lender return with further rate reductions despite plenty of uncertainty remaining around core inflation and how high the Base Rate may still need to go.
“We may see other lenders follow suit. Mortgage lending has slowed noticeably over the summer holidays and we could see more lenders fight it out to gain market share from a reduced pool of people seeking mortgages.”
Ashley Thomas, director at Magni Finance noted: “Though this is welcome news, the mortgage market remains highly uncertain and volatile. Inflation has come down but this was expected.
‘When will interest rates go down?’ List of help for mortgage struggles[INSIGHT]
Top 10 cheapest cities to own a home in the UK named[ANALYSIS]
Average new mortgage payments set to rise £288 a month – ‘absolutely brutal’[EXPLAINED]
“I expect to see more lenders look to reduce their rates as they increased them significantly in the past two months or so. Perhaps what we’re seeing is a reaction to an overreaction.”
The Bank of England increased the Base Rate for the 14th time consecutively since 2021 to 5.25 percent on August 3.
Despite this, fixed mortgage interest rates remain on a downward trend. New Rightmove data shows the average five-year fixed mortgage rate is now 5.81 percent, down from 6.08 percent this time just three weeks ago.
However, Samuel Mather-Holgate, an independent financial advisor at Mather and Murray Financial warns the spate of interest rate cuts “won’t last”, adding that further anticipated Base Rate hikes are expected to drive interest rates back up again.
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Mr Mather-Holgate said: “Lenders are still trying to attract new business by cutting rates for borrowers, but this won’t last.
“Whilst new lending has nearly dried up, lenders have the appetite to take on borrowers with little margin in their pricing, but with inflation staying high and a central bank more likely to increase rates rather than cut them, rates won’t continue to be cut for much longer.
“Until the Bank of England starts cutting rates, which should be later this year, borrowers face uncertainty around which direction the cost of borrowing money will go.”
Darryl Dhoffer at The Mortgage Expert echoed the sentiment saying: “Make hay while the sun shines, as next month could be a lot different.”
Source: Read Full Article