Santander have announced that they will now be offering mortgage products of up to 95% LTV, or mortgage products where the borrower will only need to contribute a 5% deposit. This re-introduction of 95% mortgage lending by Santander is a huge game changer for borrowers and buyers who have been unable to save a large deposit and possibly signals a return to normal lending on the horizon…although the rates are not too competitive yet!
What Are Santander’s 95% Mortgage Rates?
As well as offering new 95% mortgages, Santander have also announced a return to buy-to-let lending with an introduction of new products up to 75% LTV or 25% deposit. The two high loan to value products that Santander have announced are a two-year fixed rate at 6.64% and a five-year fixed rate at 6.59%, both with no fee and £250 cashback.
What Are Santander’s Buy-To-Let Rates?
In its buy-to-let range, two-year fixed rates are available at 6.09% up to 75% LTV for purchase and remortgage with a £1,499 fee, or 6.39% with no fee for remortgage only. Five-year fixed rates at 75% LTV start from 6.04% for purchase and remortgage with a £1,499 fee and 6.19% with no fee for remortgage.
What Could I Be Paying Per Month On A Santander 95% LTV Mortgage?
How much you pay per month on a mortgage is determined by:
- How much you borrow
- How long your mortgage term is
- The rate
So, let’s take a look at a hypothetical scenario. All of these figures are just an example and rates are changing all the time so these rates may not be available in the future.
If you were to purchase or remortgage a property worth £263,000 using Santander’s new 95% LTV products, you would need to put down a minimum of £13,150 as a deposit or 5%. That would mean that your mortgage for the other 95% of the property would be £249,850.
As long as your income and outgoings allow you to borrow up to that mark, you should be eligible for the 95% mortgage. The next thing is the mortgage term. Santander will currently let you take a standard residential mortgage up until your 75th birthday and depending on your age when you apply for the mortgage, you could have a maximum mortgage term of 40 years.
That means that if you were an average first-time buyer, you would likely be in your early 30’s when looking to get a new mortgage. Let’s assume that you take a mortgage for 35 years. By using the Santander 95% 2-year fixed deal, your mortgage payments would be £1,534 a month. If you decide to choose to fix your deal for 5 years, your payments would be £1,525.
What Could I Be Paying Per Month On A Santander 75% LTV Buy-To-Let Mortgage?
When it comes to buy-to-let mortgages, you normally have the choice of paying your mortgage as a capital and interest repayment loan or an interest only loan. Your mortgage advisor will help you choose the best way forward but normally BTL mortgages are taken out on an interest only basis (only paying the interest on the loan per month and not actually paying off the capital) because it will yield the property owner a better profit. Let’s use the same figures as before.
If a landlord were to buy a property at £263,000 as a buy-to-let using Santander’s new BTL products, they would need to put down a minimum of 25% deposit or £65,750. The other 75% of the property would need to be mortgaged for £197,250. If you were to get a 2-year fixed product with a fee at 6.09% over 35 years, you would pay £1,137 on a repayment mortgage and £1,001 on purely interest only. If you decide to go for a 5-year fixed product with a fee at 6.04% you would pay £1,130 on a repayment mortgage and £993 per month on a purely interest only basis.
Call A Mortgage Advisor About 95% Mortgages
If you want to explore your options with 95% mortgages or 75% buy-to-let products with Santander or any other lender, please give our mortgage advice team a call today to see how we can help. As experienced mortgage advisors, we have access to over 90 different mortgage lenders and can find you the best mortgage deals possible.