The products will be available from 1 June and Santander’s lending policy on mortgages above 90 per cent LTV will remain the same. This includes a restriction on lending against new-build houses and flats.
The standard rates will also be equal to the existing mortgage guarantee scheme, currently, a two-year fix is priced at 3.34 per cent and a five-year fix has a rate of 3.39 per cent. These products come with no fee.
The mortgage guarantee scheme was launched in April last year and acted as a catalyst for lenders to return to the high LTV market, which was deemed too risky at the time and resulted in restrictions on lending.
Virgin Money, Natwest, HSBC and Santander were some of the first lenders to offer mortgages at 95 per cent LTV with the government’s support. This later encouraged other providers to offer mortgages at the same tier outside of the scheme.
So far, the scheme has supported 12,388 mortgage completions at a value of £2.2bn.
Applications for the mortgage guarantee scheme are set to end 31 December.
This update marks a another move towards pre-pandemic lending for Santander, as earlier this week it announced it would raise its lending limit to 90 per cent LTV for self-employed borrowers.
