![Santander announces further mortgage rate reductions santander](https://barcadiapublications.fra1.cdn.digitaloceanspaces.com/financial-reporter/img/article/2602-shutterstock_133644740.jpg?v=9577b061a2196015546677b4d5fb6e6d)
"It also highlights that lenders still have market confidence even with another likely Bank of England base rate hike at the next meeting."
Santander has announced a further round of rate reductions of up to 0.20%, which will go live from tomorrow.
Residential fixed rates are reducing by between 2 and 20bps, while selected buy-to-let rates are also being lowered by up to 20bps.
Alongside the reductions, Santander is launching new first-time buyer exclusive rates with no fees, new residential three-year fixed rates with no fees, and a new three-year fixed rate new build range with an extended completion deadline which will replace its existing 2.5 year range.
UK news agency, Newspage, asked brokers why lenders are reducing rates given that the base rate is expected to rise further, whether we could see reductions from other lenders and if we are now in a mortgage price war.
Jamie Lennox, director at Dimora Mortgages, said: "It's great to see another Big 6 lender return with further rate reductions despite plenty of uncertainty remaining around core inflation and how high the base rate may still need to go. We may see other lenders follow suit. Mortgage lending has slowed noticeably over the summer holidays and we could see more lenders fight it out to gain market share from a reduced pool of people seeking mortgages."
Stephen Perkins, managing director at Yellow Brick Mortgages, commented: "It's excellent news to see further lender rate reductions on the back of the recent inflation and wage data. It shows that the lender rate war is still ongoing to the benefit of all homeowners. Crucially, it also highlights that lenders still have market confidence even with another likely Bank of England base rate hike at the next meeting."
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, said: "Lenders are still trying to attract new business by cutting rates for borrowers, but this won't last. Whilst new lending has nearly dried up, lenders have the appetite to take on borrowers with little margin in their pricing, but with inflation staying high and a central bank more likely to increase rates rather than cut them, rates won't continue to be cut for much longer. Until the Bank of England starts cutting rates, which should be later this year, borrowers face uncertainty around which direction the cost of borrowing money will go."
Ranald Mitchell, director at Charwin Private Clients, added: "The fight continues for market share and it's worth noting that buy-to-let rates are dropping too. With so many landlords being hammered, perhaps Santander sees an opportunity to grow their share of the market with property investors. Either way, rate decreases are great news for everyone and underline how mortgage lending targets remain way off course as demand for higher interest borrowing is low."