As the UK housing market adapts to evolving economic pressures, two major lenders—Santander and TSB—have announced notable mortgage rate changes.
These adjustments signal a strategic response to inflation trends, Bank of England rate decisions, and shifting borrower demand.
This article provides an in-depth breakdown of the latest updates, how they affect borrowers, and what you need to consider whether you’re remortgaging, moving home, or buying for the first time.
Santander Mortgage Rate Changes: Updated Fixed and Tracker Products
Santander has revised its residential and buy-to-let mortgage products, impacting new customers and those looking to remortgage.
Key Highlights:
New Fixed-Rate Deals: Selected 2-year and 5-year fixed-rate mortgages have been reduced by up to 0.20%, making them more competitive in the current market.
Buy-to-Let Mortgages: Santander has improved buy-to-let fixed-rate products, particularly for landlords with higher equity or LTV ratios.
Product Transfer Rates: Existing Santander customers looking to switch to a new deal will benefit from lower product transfer rates, especially on fixed terms.
Current Santander Rates Snapshot
Residential Fixed (2 years): From 4.49%, up to 75% Loan-to-Value (LTV)
Residential Fixed (5 years): From 4.24%, up to 75% LTV
Buy-to-Let Fixed (2 years): From 5.09%, up to 60% LTV
Buy-to-Let Fixed (5 years): From 4.89%, up to 60% LTV
Tracker Mortgage (Variable): Base Rate + 0.99%, up to 70% LTV
Note: All products are subject to affordability checks and may include arrangement fees between £999 and £1,499.
TSB Mortgage Rate Updates: Expanded Range and Rate Reductions
TSB has responded with a broad re-pricing across its residential and remortgage ranges, aimed at attracting both first-time buyers and home movers.
Key Updates:
Fixed-Rate Decreases: Select 2-year and 5-year fixed rates have been reduced by up to 0.25%.
Remortgage Incentives: TSB is enhancing its free legal and valuation offerings, particularly for remortgage customers.
Product Transfer Improvements: Reduced rates on internal switches for existing borrowers, offering loyalty rewards.
Current TSB Rates Snapshot
First-Time Buyer (2 years fixed): From 4.39%, up to 85% Loan-to-Value (LTV)
First-Time Buyer (5 years fixed): From 4.19%, up to 85% LTV
Remortgage Fixed (2 years): From 4.29%, up to 75% LTV
Remortgage Fixed (5 years): From 4.09%, up to 75% LTV
Product Transfer (Variable rate): From 3.99%, no LTV cap is specified
Important: Borrowers with stronger credit profiles and lower LTV ratios are more likely to qualify for the most competitive rates.
Implications for Borrowers in 2025
With inflation easing and markets anticipating gradual BoE base rate cuts, Santander and TSB are positioning themselves to compete aggressively. For borrowers, these changes offer timely opportunities to lock in rates before further fluctuations.
For First-Time Buyers:
Lower 5-year fixed rates offer stability in a still-volatile market.
High-LTV products remain accessible, although rates are typically higher.
For Remortgaging Homeowners:
Timing is critical—many fixed-rate deals are ending in 2025.
Switching to a new lender or product with free legal support can reduce costs.
For Buy-to-Let Investors:
Lower fixed-rate deals provide breathing room amid tightening rental yields.
Stress testing remains rigorous, especially on higher-LTV applications.
Strategies for Homeowners in a Changing Mortgage Market
Lock In Longer-Term Deals
As short-term volatility persists, 5-year fixed products offer predictability, particularly with lenders cutting rates.
Consider Product Transfers
Existing customers can often get competitive rates with reduced fees and less paperwork.
Explore Fee-Free Options
Many lenders offer no-fee deals that may be cost-effective over time despite slightly higher rates.
Improve Your Credit Score
Better credit profiles unlock lower rates. Check and optimise your credit report before applying.
Projected Trends for 2025 and Beyond
We expect further rate realignments from major lenders in response to BoE policy shifts. Increased market competition may lead to more innovative fixed and flexible mortgage solutions.
Conclusion: Take Action on Your Mortgage Today
With Santander and TSB revising rates downward, this is a key moment for mortgage holders and buyers to reassess their options.
Whether you are seeking to remortgage, invest in property, or buy your first home, these updates represent a chance to secure a better financial future.
Compare rates, consider product features, and act early—the best deals rarely last long in today’s fluid market.
Frequently Asked Questions (FAQ)
Why are Santander and TSB changing their mortgage rates now?
Both lenders are responding to recent shifts in the Bank of England’s base rate, easing inflation, and increased competition in the mortgage market. These changes aim to attract new customers and retain existing ones.
Are fixed or variable mortgage rates better in 2025?
Fixed rates offer stability and protection against future rate hikes, while variable rates may offer lower initial payments but come with the risk of increases. The best option depends on your financial situation and risk tolerance.
Can existing Santander or TSB customers access the new lower rates?
Yes, both lenders offer product transfer deals, allowing existing customers to switch to new rates, often with lower fees and no need for a complete application.
What does LTV mean, and why is it important?
LTV stands for Loan-to-Value ratio, which compares your mortgage amount to the property’s value. Lower LTVs typically qualify for better interest rates because they represent lower risk to the lender.
Are there any fees involved with these new mortgage deals?
Yes. Arrangement fees can range from £999 to £1,499, depending on the product. Some deals also include free valuations or legal assistance, particularly for remortgages.
How can I improve my chances of getting the best mortgage rate?
To access the most competitive rates, maintain a strong credit score, reduce your overall debt, and aim for a lower LTV by saving for a higher deposit or building more equity in your home.
Should I wait for rates to drop further before closing a deal?
While rates may continue to adjust, predicting the market is demanding. If you find a competitive deal that fits your needs, it may be wise to lock it in now—especially if your contract ends soon.
Can I switch lenders even if I have time left on my current mortgage?
Yes, but early repayment charges may apply. Always check your existing mortgage terms and consult with a broker to weigh the cost of switching against potential savings.
Read our other Blogs:
