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No end to mortgage rate war as Santander unveils lowest ever five-year fix

Joanna Faith
Written By:
Joanna Faith

Santander has launched its lowest ever five-year mortgage deal.

The 1.49 per cent rate is available to both purchase and remortgage customers with a 40 per cent deposit in branch, by phone, online or through a broker.

Rachel Springall, finance expert at Moneyfacts, says the deal is the current market-leader for direct customers as it beats the previous cheapest deal, which was 1.53 per cent from Skipton Building Society.

However, borrowers can access a lower five-year rate – 1.45 per cent from Skipton – if they go through a broker.

Santander has also slashed a range of two-year and ten-year fixed rate products.

Remortgage customers with a 40 per cent deposit can now get a market-leading two-year fix at 1.15 per cent – but this deal is available online only. It pips the Natwest Intermediary Solutions offer of 1.19 per cent and beats the next best direct deal from Barclays Mortgage at 1.21 per cent.

The ten-year fix – available to purchase and remortgage customers with a 35 per cent deposit – has been cut by 0.15 per cent to 2.34 per cent.

All new rates are available from 22 October.

Commenting on the cuts, Springall said: “This latest move by Santander just goes to show that the mortgage rate war isn’t over. As one of the biggest mortgage brands in the country, these latest market-leading direct deals will not only appeal to new borrowers, but also those looking to remortgage.

“As we near the end of 2019 it could well be the case that Santander is monitoring their lending targets and is revamping its range to entice borrowers. It’s important that lenders not only attract new blood, but also retain their mortgage book and it is entirely possible that other lenders may react to this latest launch to improve their own range.

“All in all its good news for mortgage customers hoping to lock into a competitive rate amidst economic uncertainties.”