The cashback is offered on completion of two and five-year fixed rate products, at 2.99% and 3.39% respectively.
They both provide 95% loan to value (LTV).
The bank has also reduced its two-year fixed rates by 0.05% to 1.44% and 1.74%, with £999 and a £0 fee respectively, at 60% LTV, for both purchases and remortgages.
Its five-year fixed rate has been cut by up to 0.10% to 1.99% and 1.89%, at 60% and 75% LTV respectively, for both purchases and remortgages.
Additionally, Santander has introduced a new 60% LTV, 10-year fixed rate at 2.39%, £999 fee, for purchases and remortgages.
Miguel Sard, managing director of Santander Mortgages (pictured), said: “We know a lot of first-time buyers opt for two and five-year fixed rate mortgages.
“By offering free valuations and introducing £500 cashback, we hope to give customers a helping hand towards the cost of kitting out their dream home.”