Santander has announced a series of new deals, slashing rates and offering some of the best terms available. This change is particularly useful for those looking to secure a mortgage, as rates edge closer to the 4% mark on two-year fixes, a major boon for borrowers.

Two-Year Fixes – A Preferred Choice

Santander’s reduction in their lowest two-year fixed rate deal from 4.55% to an impressive 4.1% marks a significant shift in the mortgage landscape. This rate cut positions the deal as a ‘best buy’ in the current market. These two-year fixed deals are not just competitive but also the preferred choice for over half of the borrowers, offering a balance between rate stability and flexibility.

The Impact on Your Pocket

To put these figures into perspective, consider a standard £200,000 mortgage taken over 25 years. Under the average two-year fix rate of 5.09%, a borrower would be paying around £1,180 per month. However, with Santander’s new 4.1% deal, this payment drops to £1,067 per month, saving a substantial £113 monthly. It’s clear how these changes can significantly affect homeowners’ monthly budgets.

Five-Year Fixes vs. Two-Year Deals

Interestingly, while two-year fixes are currently in vogue, five-year fixes often come cheaper. The lowest rate for a five-year fix is around 3.92%. Yet, despite this, December data from L&C Mortgages revealed a surprising trend: more than half of home buyers opted for two-year fixed rates, perhaps in anticipation of lower rates when they refinance in the future.

Santander’s New Rates Across Deposit Ranges

Santander’s rate cuts aren’t just for those with hefty deposits. Buyers with a 25% deposit can now secure a 4.15% rate, and those with a 15% deposit can get a 4.52% rate – both leading offers in their respective categories. This inclusive approach means that more people can benefit from these lower rates, regardless of their deposit size.

Five-Year Fixed Rate Adjustments

Santander hasn’t limited its adjustments to two-year deals alone. They’ve also revised their five-year fixed rate offerings. A buyer with a 15% deposit can now secure a 5.24% rate on a five-year fix, a competitive deal in today’s market.