Santander brings out high-LTV new-build products
Santander’s maximum LTV used to be a maximum 85 per cent for new-build houses and 80 per cent for new-build flats.
The change makes Santander – which recently increased its fixed rates – the only top-six lender in the UK to go up to 95 per cent LTV across new-build flats and houses through all builders and all brokers.
Customers buying a new build with a 95 per cent LTV mortgage will be able to select from the bank’s range of 95 per cent LTV of five-year fixed rates.
Graham Sellar, Santander’s head of development of mortgages, said: “We know that saving for a deposit is one of the biggest hurdles for aspiring homeowners, especially for those juggling rental payments against trying to save.
“Our change will not only help more buyers get onto the property ladder sooner but, also, with the majority of new-build properties achieving an Energy Performance Certificate (EPC) rating of A or B, support the wider transition to greener living.”
He added: “The change from Santander comes at the start of the 2024 New Homes Week (NHW), an annual awareness campaign from the Home Building Federation (HBF), the representative body of homebuilders whose members build 80 per cent of all new homes in the UK in any one year. The theme for this year’s week, which starts on Monday 26 February, is ‘Tomorrow awaits: Make it yours’.”
David O’Leary, executive director at the HBF, added: “Santander’s introduction of 95 per cent LTV mortgages for new-build homes is extremely welcome. Most of us recognise that there is a shortage of homes and it’s becoming harder for younger households to step into homeownership.
“Improving the availability of mortgages not only helps address the country’s growing housing divide, but it provides confidence for housebuilders to invest and continue to deliver more high-quality and energy-efficient new homes in the years ahead.”
Adrian MacDiarmid, head of mortgage lender relations at Barratt Developments, said: “The increase in LTVs is a testament to Santander’s support for the new-build market and to their commitment to addressing not just the challenge of first-time buyers aspiring to own their own home, but also our collective responsibility to support the transition to a lower-carbon economy.”
Santander ups rates as sub-four per cent deals retreat from market
Santander said that, in its new business range, all standard residential fixed rates will go up by between 0.23 per cent and 0.34 per cent.
The lender will increase all residential new-build exclusive fixed rates by between 0.25 per cent and 0.34 per cent, and all residential large loan exclusive fixed rates will rise by between 0.23 per cent and 0.33 per cent.
Also, in its new business range, the lender will up all BTL fixed rates by between 0.23 per cent and 0.33 per cent.
Within its product transfer range, selected residential fixed rates are increasing by between 0.05 per cent and 0.20 per cent, and selected BTL fixed rates are increasing by between 0.05 per cent and 0.15 per cent.
Sub-four per cent deals could fade from the market temporarily
The latest figures from Moneyfacts today show that there are 17 residential mortgage products under four per cent on the market currently. Lenders include AIB, Danske Bank, HSBC and Santander.
Brokers have said that sub-four per cent mortgages may disappear from the market in light of rising swap rates and low lender margins.
Chris Sykes, technical director at Private Finance, said that sub-four per cent rates could briefly disappear this week.
He pointed to rising swap rates over the past few weeks, which had left “very little margin” for lenders.
However, Sykes said that rate increases would typically range from 0.2 to 0.3 per cent.
He noted that it could be a “good opportunity” for potential borrowers to fix a rate, as “we may well have seen the bottom of rates for a little while”.
“You can always lock something in now and monitor the market for a month or two to see if things change,” Sykes noted.
He continued that the mortgage pricing trajectory was dependent on the next few inflation and base rate figures, and it may be unlikely for sub-four per cent mortgages to return until the base rate was cut, as it would give a “level of confidence to the market”.
Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, said: “Initial market expectations factored in multiple bank rate reductions throughout the year, commencing in March. However, recent data from both domestic and internationally, particularly the US, suggests that such reductions may not materialise until at least June.
“Given the nature of the market, those who may be hesitant to commit to a deal should act quickly to secure a deal. While we anticipate a reduction in fixed rates, the timeline for this adjustment may be somewhat longer than initially expected.
“It is important to note that, even if you secure a deal, there is still flexibility to make changes close to completion, should a more favourable offer become available.”
Santander cuts rates; Clydesdale launches deals and adjusts pricing – round-up
From 13 February, the lender will cut select standard residential fixed rates for remortgage by between 0.05 per cent and 0.16 per cent. This applies to new borrowers.
Also, for new business, all BTL fixed rates will be reduced by between 0.05 per cent and 0.15 per cent.
Santander will also lower the corresponding options in its product transfer range by the same amount.
Elsewhere, the bank will be increasing its one-year fixed residential product transfer rates by between 0.07 per cent and 0.17 per cent.
Earlier this month, Santander lowered purchase rates by up to 0.2 per cent.
Clydesdale makes rate changes
Clydesdale Bank has made a series of changes to its range.
From 8pm on 12 February, the lender will increase select residential fixed rates by up to 0.2 per cent, and withdraw exclusive residential purchase products at 65 per cent loan to value (LTV) and selected professional and newly qualified professional deals.
Applications must be submitted by 8pm to secure outgoing products.
From 13 February, Clydesdale Bank will reduce select two- and five-year fixed rates at 95 per cent LTV by up to 0.3 per cent, and select fixed rates for professional and newly qualified professional options will be cut by up to 0.6 per cent.
The minimum loan size for professional mortgages has also been lowered to £100,000.
Within its exclusive range, the lender has added two- and five-year fixed rates to its interest-only range at 65 per cent LTV and 75 per cent LTV for borrowing amounts between £1m and £2m. Rates across this range will start at 4.18 per cent.
The minimum loan size across select purchase and remortgage fixed rates in its exclusive offering will be lowered to £150,000.
Virgin launches broker campaign
Virgin Money has set up a broker campaign where it will offer prizes in return for feedback on its service.
The first prize announced for the ‘Bringing you more in 2024’ campaign is a two-week safari trip to Kenya.
Richard Walker, Virgin Money’s head of intermediary sales, said: “The ‘Bringing you more in 2024’ campaign is all about getting genuine feedback from our intermediary partners so that we can continue to make our service the best it possibly can be. ‘Bringing you more’ offers a years’ worth of money-can’t-buy prizes, and the feedback we receive will be invaluable in helping us address key issues within our mortgage process.”
Santander lowers purchase rates by up to 0.2 per cent
On the two-year fixed rate side, Santander has cut its fixed rate residential purchase deal at 60 per cent LTV from 4.25 per cent to 4.2 per cent.
Its two-year fixed rate at 75 per cent LTV has dropped from 4.35 per cent to 4.3 per cent.
The lender’s two-year fixed rate at 90 per cent LTV has gone down from 4.94 per cent to 4.89 per cent.
Santander has lowered its five-year fixed rate at 60 per cent LTV from 4.04 per cent to 3.94 per cent.
Its five-year fixed rate at 75 per cent LTV has fallen from 4.24 per cent to 4.14 per cent and at 90 per cent LTV the decrease is from 4.84 per cent to 4.64 per cent.
All the above products come with a £999 fee.
Santander is the latest high street lender to change rates, with HSBC lowering select residential and buy-to-let rates by up to 0.45 per cent yesterday. The lender also increased some rates slightly.
Last week, Halifax lowered select homebuyer deals but upped other rates, such as select remortgage, product transfer and further advance deals.
The latest financial results from high street lenders, with the latest so far including Virgin Money and TSB, indicate that firms are feeling more confident about the outlook for the market, with both saying they expect an uptick in activity and falls in pricing.
Santander’s gross mortgage lending plunges to £13.1bn in 2023
A spokesperson for the bank said: “The mortgage market has slowed, and funding costs are significantly higher. In this environment, we reduced gross mortgage lending.”
Meanwhile, its update for the year said: “With a slower housing market and higher mortgage rates, applications fell in 2023.”
Santander reported that it also saw an £11.9bn decline in net mortgage lending, which it attributed to an optimisation of its balance sheet due to higher funding costs.
The bank said it would continue on this strategy in 2024, which would lead to “lower deposits and mortgage lending as we continue to prioritise profitability, capital generation and our core banking franchise”.
Its mortgage book amounted to £175.2bn in 2023, which was slightly down on the previous year’s figure of £187.1bn. Some £45bn of its portfolio accounted for new business and internal transfers.
This year, £39.3bn worth of mortgages on its book are due a refinance.
Purchasers top remortgagors among Santander borrowers
Homemovers made up 42 per cent of Santander’s portfolio last year, while remortgagors made up 28 per cent and first-time buyers accounted for 21 per cent of business.
It said buy-to-let activity remained a small portion of its book at nine per cent.
The average loan to value (LTV) of its existing borrowers was 51 per cent and new business was 66 per cent LTV.
Santander said arrears were still low across its borrower base, but noted a small rise across the portfolio. This represented a rise from 1.24 per cent at the end of 2022 to 1.49 per cent of its book by the end of 2023.
Of these, 0.8 per cent were in arrears of more than 90 days which was up from 0.62 per cent previously.
The bank’s net interest margin came to 2.2 per cent across 2023, up from 2.06 per cent the year before, which it owed to the higher base rate and “balance sheet management”. It said going forward, this was set to decline.
Profit on the up
Santander UK posted a profit before tax figure of £2.14bn, up from £1.89bn the year before marking a 13 per cent annual rise.
Its profit after tax was 12 per cent higher at £1.59bn.
Mike Regnier, chief executive of Santander UK, said: “Despite the difficult backdrop, our prudent approach to risk and the hard work of everyone at Santander UK has delivered a strong set of results for 2023
“As we look ahead to 2024, we expect interest rates and inflation to fall. We will continue to execute on strategic initiatives focused on building customer loyalty, creating value and simplifying our business. By working together with Banco Santander Group, we will harness the best of our local and global capabilities to develop new and innovative products and services for our customers and deliver the benefits of our scale.”
Santander lowers BTL affordability rates; Atom cuts pricing – round-up
Its standard affordability rate for buy-to-let will decrease from 8.04 per cent to 7.38 per cent, while the five-year fixed affordability rate will fall from 6.54 per cent to 5.88 per cent.
The affordability rate for its pound-for-pound remortgage will be set at 5.88 per cent, also down from 6.54 per cent.
The changes will not apply to full mortgage applications submitted by 29 January but the new policy will apply to applications placed from 30 January.
Atom Bank cuts prime mortgage rates
Atom Bank has lowered prime mortgage rates by up to 0.25 per cent, including two, three and five-year fixed rates.
The digital bank has cut three-year fixed rates between 80 and 95 per cent loan to value (LTV) by up to 0.25 per cent with pricing beginning from 4.89 per cent.
Atom has also reduced two-year fixed rates at 90 and 95 per cent LTV by up to 0.2 per cent, with rates starting from 5.19 per cent.
Five-year fixed rates have gone down by around 0.15 per cent with pricing beginning from 4.54 per cent.
All the products come with a free valuation and remortgage products come with fee-assisted legals.
Richard Harrison, head of mortgages at Atom, said: “We are really pleased to be able to deliver yet another rate reduction to customers, cutting prices at higher LTVs as we continue to help this vital segment of the market.
“This latest round of cuts will make our mortgages even more accessible to a greater number of aspiring homebuyers and remortgagors, and behind all of our products is a speedy digital process that delivers increased certainty as well as excellent value.”
The lender lowered commercial rates to 5.75 per cent yesterday and reduced five-year fixed rates by up to 0.7 per cent at the start of the month.
Average mortgage rates continue to fall despite swap changes – Rightmove
This week has seen a number of major players including Nationwide, Family and Virgin Money all reduce their mortgage rates across various residential, buy-to-let and remortgage products.
However, one high street lender Santander moved in the other direction and chose to hike up prices in response to rising swap rates.
Experts have noted that the move was hardly surprising given the current volatile market but that it is unlikely to cause a long-term domino effect of lenders pushing up their prices.
Nicholas Mendes, a mortgage expert from Jon Charcol, said: “This latest repricing from Santander had been expected due to the increase in swaps from when these original deals were priced. It’s only a surprise that it’s taken this long. I expect we will see a few lenders among the best to make slight adjustments, though this isn’t a long-term trend as rates are expected to decrease over the year.”
Indeed, in its weekly update, Rightmove noted that rates across all metrics are lower than they were a year ago.
The average five-year fixed mortgage rate is now 4.67 per cent, down from 4.85 per cent a year ago. The average two-year fixed rate is now 4.98 per cent, down from 5.16 per cent a year ago.
The average 85 per cent loan-to-value (LTV) five-year fixed mortgage rate is now 4.60 per cent, down from 4.88 per cent a year ago and the average 60 per cent LTV five-year fixed mortgage rate is now 4.13 per cent, down from 4.57 per cent a year ago
Rightmove also calculated that the cost of a mortgage for a first-time buyer has also fallen in the last year. The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85 per cent LTV mortgage, is now £1,062 per month, down from £1,093 per month a year ago.
Average mortgage rates continue to trend downwards
Matt Smith, Rightmove’s mortgage expert said: “Some conflicting rate trends reported this morning shows that lenders are treading a fine line between offering some of the most competitive rates in many months and being caught offside by swap rate changes. Lender margins remain tight, and indeed after a VAR check it appears one lender jumped the gun slightly with its rate cuts, needing a slight correction.
“This doesn’t change the big picture that overall, average rates continue to trend downwards, with further reductions in this week’s data, and more expected to come, with those looking to take out a mortgage soon likely to see much more attractive deal on offer for them than at the peak six months ago.”
Santander and Skipton announce rate cuts; MPowered launches cashback – round-up
The lender is also withdrawing selected residential first-time buyer exclusive fixed rates with £500 cashback. Santander said that there would be rate cuts to selected standard residential fixed products by between 0.05 per cent and 0.45 per cent for purchases.
All new build exclusive fixed rates are going down by between 0.17 per cent and 0.35 per cent.
Skipton BS announces rate cuts
Skipton Building Society has introduced rate cuts of up to 0.27 per cent, with the rates of 63 products falling.
The largest reduction is its two-year fixed rate at 75 per cent loan to value (LTV) which has gone down from 4.99 per cent to 4.72 per cent. It comes with a £1,495 fee.
The firm’s Track Record mortgage has fallen by 0.17 per cent to 5.35 per cent, the lowest ever Track Record rate. It is 0.14 per cent lower than when the product came to market in May last year.
Its five-year fixed rate at 95 per cent LTV has contracted by 0.15 per cent to 4.96 per cent with £1,295 fee and its no-fee five-year fixed rate at 90 per cent LTV falling by the same amount to 4.84 per cent.
Jennifer Lloyd, head of mortgage products and propositions at Skipton Building Society, said: “I’m delighted to announce that exactly a week after we reduced our rates we have today announced a further 63 reductions to our range.
“This includes both new and existing customer products as well as a further reduction to track record mortgage which sees it drop to its lowest ever rate.”
MPowered Mortgages to offer cashback as percentage
MPowered Mortgages has launched cashback of 0.3 per cent on all loan sizes up to £1.5m.
This compares to other lenders who offer fixed cashback on completion, with this product meaning there is more cashback, the more you borrow.
The lender’s five-year fixed rate at 75 per cent LTV is 4.28 per cent with a £999 fee, and at 80 per cent LTV the rate is 4.38 per cent.
If borrowers decide to pay the mortgage early then MPowered Mortgages will “not claw back cashback at any stage during the fixed rate period”.
Stuart Cheetham, CEO at MPowered Mortgages, said: “We are excited to be the only mortgage lender to offer cashback as a percentage of the loan size. We anticipate this will be particularly attractive to Londoners and those in the South who generally have higher loan sizes than the rest of the UK.
“When borrowers day-to-day expenses are rising, a percentage cashback product should enable borrowers to overcome some of the additional costs of moving home as the cashback back payment is paid to the customer as soon as they complete on the mortgage.”
Santander brings in sub-four per cent rates
Santander has joined a slew of high street competitors including Barclays and slashed its rates. The change will come in on 10 January and includes a remortgage at 60 per cent loan to value (LTV) with a £999 fee and a rate of 3.89 per cent. The purchase option has a rate of 3.94 per cent.
All its standard fixed rates for new residential borrowers will be reduced by between 0.17 per cent and 0.82 per cent.
Its exclusive fixed rates for new-build properties will go down by as much as 0.56 per cent, while large loan fixed rates will fall by 0.25 per cent.
Santander has reduced two and five-year fixed rates for buy-to-let borrowers by between 0.21 per cent and 0.56 per cent. The lender will be withdrawing all three-year fixes for buy-to-let borrowers.
Santander product transfer changes
Santander has reduced rates across its product transfer range, with residential fixes reduced by up to 0.82 per cent. Two and five-year fixed product transfer rates for buy-to-let borrowers will also be cut by up to 0.56 per cent and the lender will withdraw three-year fixes from this range too.
Santander will extend completion deadlines by one month and product transfer borrowers can change their rate if they have not yet accepted the mortgage offer.
If they have accepted the product transfer offer, they can change or cancel and rebook their rate if there are at least 14 days before the new deal starts.
Santander lowers resi and BTL rates; TMW cuts rates – round-up
In its new business range, selected standard residential fixed rates are falling by between 0.03 per cent and 0.32 per cent.
Selected new build exclusive fixed rates are being cut by between 0.15 per cent and 0.20 per cent.
All large loan fixed rates are reducing by 0.15 per cent and selected buy-to-let fixed rates are decreasing by between 0.03 per cent and 0.18 per cent.
On the product transfer side, selected residential fixed rates are falling between 0.03 per cent and 0.3 per cent and selected buy-to-let fixed rates are decreasing by between 0.03 per cent and 0.18 per cent.
New business and product transfer completion deadlines will roll on by one month.
TMW slashes rates
TMW is lowering rates for new and existing customers by up to 0.4 per cent with pricing beginning from 4.19 per cent.
In its new customer range, its two-year fixed rate for purchase and remortgage at 65 per cent LTV has fallen by 0.15 per cent to 4.19 per cent.
The lender’s two-year fixed purchase and remortgage rate at 75 per cent LTV will fall by 0.15 per cent.
The firm’s five-year fixed purchase and remortgage rate will decrease by 0.2 per cent to 4.54 per cent.
The products above come with a three per cent fee.
TMW is also reducing rates for new customers by up to 0.40 per cent on its large portfolio and let-to-buy ranges.
The company is also cutting rates by up to 0.2 per cent on the green further advance products, existing buy-to-let customer rates by up to 0.25 per cent large portfolio product by up to 0.2 per cent.
Houses in multiple occupation (HMO), large portfolio HMO, limited company HMO products are going down by up to 0.30 per cent.
Daniel Clinton, head of buy-to-let mortgages at TMW, said: “These latest rate cuts are focused on ensuring we are supporting all types of landlords and their needs, and follows on from last week’s reductions for HMO and Limited Company landlords.
With rates starting from 4.19 per cent TMW offer some of the most competitive rates in the market which we hope demonstrates our continued commitment and support for the sector.”