Well Ladies and Gentlemen…it has finally happened! The UK mortgage market has taken an exciting turn as two major lenders, Santander and Barclays, introduce mortgage products with interest rates below 4%! This is something that we have all been waiting for as rates have teetered closer and closer to the edge of 4% and 3%, marking a significant milestone for UK mortgage lending and reflecting the broader trend of rate reductions across the industry in response to the Bank of England’s recent base rate cut from 4.75% to 4.50%. Over the next couple of days, Santander and Barclays mortgage rates will drop, providing relief for thousands of borrowers. In this article, I will go through the rate changes for both lenders, and offer my own insights on the market in 2025.
New Competitive Santander and Barclays Mortgage Rates Below 4%
Santander’s Competitive New Mortgage Rates
From Thursday the 13th of February 2025, Santander is rolling out 3.99% fixed-rate mortgages for both 2-year and 5-year terms at 60% loan-to-value (LTV) for new residential purchases and remortgages. This move makes Santander one of the most competitive lenders in the market, particularly for borrowers with substantial equity. So people who either have a 40% deposit to purchase a new property, or people who currently have 40% or more equity in their existing home can benefit from a rate of 3.99%.
In addition to these fantastic rates, Santander is making other reductions across its mortgage offerings:
- Buy-to-let (BTL) rates: New 65% LTV products introduced, with 2-year fixed rates from 4.35% (£1,749 fee) and 4.89% (£0 fee), and 5-year fixed rates from 4.32% (£1,749 fee) and 4.59% (£0 fee).
- Tracker mortgages: All new business and product transfer tracker rates will be reduced by 0.25% in line with the base rate cut.
- Fixed-rate reductions: Residential and BTL fixed rates are dropping by up to 0.40%.
- Standard Variable Rate (SVR): Set to decrease to 6.75%.
Barclays’ Competitive New Mortgage Rates
Barclays has also made a bold move and followed Santander’s lead by cutting rates on several of their key mortgage products. Notably, their Premier 5-Year Fixed Rate mortgage will now be available at 3.99% with a £899 product fee, at 60% LTV.
Other significant Barclays rate reductions include:
- Green Home 5-Year Fixed: Dropping from 4.13% to 3.99%.
- 5-Year Fixed at 60% LTV: Falling from 4.40% to 4.26%.
- 2-Year Fixed at 90% LTV: Reduced from 5.56% to 5.41%.
- Remortgage rates: Notably, a 2-Year Fixed at 60% LTV will drop from 4.47% to 4.21%.
What Does This Mean for UK Borrowers?
The introduction of sub-4% mortgage rates from major lenders is a strong indication that the mortgage market is beginning to ease. With the Bank of England’s base rate cut, lenders are passing on savings to consumers, making homeownership and remortgaging more affordable. These changes to Santander and Barclays mortgage rates from two lending giants are only a positive sign that things are going in the right direction in my opinion.
So, what’s next for UK mortgage rates in 2025? While it’s too early to predict with certainty, I anticipate that if inflation continues to decline then mortgage rates could stabilise or even fall further. However, external economic pressures, including global market volatility and political uncertainties, could still have an impact. For example, we are only a few weeks in to Donald Trump’s second presidency, so we are still not aware of the impact that this might have on global markets.
Secure A Sub-4% Mortgage With An Expert Mortgage Advisor
For homebuyers and those considering remortgaging, now is a great moment to secure a deal while rates are low. With lenders competing for business, we may see even more attractive offers emerging in the coming months. With Santander and Barclays mortgage rates leading the charge, now is the time to take advantage of low rates. Whether you’re purchasing a new home or looking to remortgage at a better rate, our team of expert mortgage advisors at Oportfolio Mortgages is here to help. Give our team a call today to speak to one of our advisors.
