SANTANDER is the latest major high street lender to announce rate reductions, with cuts of up to 0.21% for first-time buyers, which will go live tomorrow. The cuts follow reductions by Virgin Money on Monday.
Brokers welcomed the cuts and said competition returning to the mortgage market is good news for borrowers, but equally warned them not to assume the only direction for rates is down given international and domestic volatility.
For first-time buyers with Santander, all 2-, 5- and 10-year fixed rates and some 3-year fixed rates will be reduced by up to 0.21%.
Meanwhile, for home movers, all fixed rates will be reduced by up to 0.19% and all 60%-75% loan-to-value (LTV) tracker rates will be reduced by up to 0.15%.
For residential remortgages, all fixed rates will be reduced by up to 0.13%.
Santander’s cuts come as the Nationwide reveals UK annual house price growth edged up to 2.2% in June, from 1.7% in May.
Tracey Dixon, Owner at Cardiff-based Pure Mortgage and Protection, said “Santander’s latest rate cuts are another welcome sign that competition is returning to the mortgage market”.
She added even small rate reductions can make a “meaningful difference” for borrowers and urged people to review their options: “The biggest message is that rates are changing quickly, so anyone with a mortgage offer in place or whose current deal is ending soon should review their options.
“I’ve already been able to secure lower rates for clients before completion simply because we’ve kept a close eye on lender pricing. If competition continues, borrowers can hopefully expect more choice over the coming months.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, also welcomed the cuts: “Another major lender making some decent rate reductions is encouraging news for borrowers.
“If rates continue to edge down, July and August could be busier than usual as many people put their moving plans on hold due to the uncertainty and higher rates caused by the war in the Middle East.”
Katy Eatenton, Mortgage & Protection Specialist at Weybridge-based Eatenton Finance, said “mortgage rates are finally moving in the right direction and it feels like a little momentum is growing”.
She continued: “The big lenders are now starting to make their moves. As ever, borrowers should not take anything for granted, as international events and political change domestically could change the trajectory very quickly.”
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, added: “All rate cuts are welcome, but they are not enough to get Britain moving. Compared to where we were before the war, fixed rates are still carrying about 0.5% of “fat”, and even if that went away, we could still be in limbo.
“We need stamp duty reform to inject a quick shot of adrenaline into the flatlined housing market, and Burnham could be the one administering the dose.”
Santander’s cuts come as the Nationwide reveals UK annual house price growth picked up to 2.2% in June, from 1.7% in May.
Rupert Collingwood, Founder at The London Broker, said “while it’s positive to see some growth, the devil is in the detail, as house price values will vary from street to street, house to house.”
He continued: “The growth is likely concentrated in particular market segments, most likely the more affordable end of the property ladder, where activity and transactions are also concentrated, with mid and upper segments likely losing ground.
“My message to Andy Burnham: nothing helps cool the market faster than politicians floating kites aimed at tax changes on the biggest asset most people buy and sell.”
