Santander becomes first lender to launch sub-4% two-year fixed rate

Santander is introducing sub-4% residential mortgage rates in its latest round of reductions, including a 3.99% two-year fix.

From tomorrow, Santander is reducing selected standard residential and buy-to-let fixed rates by up to 0.29%. As a result, its lowest 60% LTV residential purchase fixed rates with a £999 fee will be a two-year product at 3.99%, a three-year fix at 3.94% and a five-year rate at 3.80%. 

Santander's previous lowest rate was a five-year fix at 4.02%. The new product launch also makes Santander the first Big Six lender to reintroduce a sub-4% two-year fixed rate this year. HSBC's lowest current two-year fix is 4.14%, while Nationwide's is 4.10% and Barclays is offering a rate of 4.19%.

As part of the latest reductions, Santander is reducing all new build fixed rates by up to 0.23% and selected residential and buy-to-let fixed rates in its product transfer range.

Selected residential and buy-to-let fixed rates are also reducing in its product transfer range.

In addition, the bank is introducing new buy-to-let two-year tracker rates in its new business and product transfer ranges. 1-year buy-to-let fixed rates will be withdrawn as part of the changes.

Graham Sellar, head of mortgage development at Santander, said: “We know how hard people work to afford their home and as the property market continues to warm up, we are pleased to deliver this range of rate cuts, which should support more buyers in affording their home.”