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Santander leads the way in 2025 by launching sub-4% mortgages

ended 11. February 2025

Santander UK has announced it will become the first high-street mortgage lender to offer a sub-4% 2- and 5-year mortgage in 2025. From Thursday 13 February, eligible customers will be able to apply for one of four new products as the lender launches a range of two and five-year fixed, 3.99%, residential purchase and remortgage rates, at 60% LTV.

The lender has also announced reductions of up to 0.40% on more than 80 other mortgages products, also live from Thursday. The raft of rate cuts impacts residential purchases, remortgages, new build purchases, as well as buy-to-let purchases and remortgages. In addition to the new 3.99% residential products, the lender is introducing a new range of 65% LTV options on Buy-to-let (BTL) for purchase and remortgage customers, giving them more choice between 60% and 75% LTV. Newspage asked brokers for their views, below.

12 responses from the Newspage community

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Simon Bridgland
Broker at Charwin Private Clients
Determined to show they’re not leaving the UK market, Santander come out swinging and making headlines for all the right reasons. Santander are the first of the heavyweights to wade back into the sub-4% arena. Though it comes with a pretty hefty fee of £1,999, it still packs a mighty punch for those with larger mortgage needs. They need to be light on their feet though as I’m sure other contenders will follow soon in the next round of fixed rate cuts. This really does rub some salt into the wound of Halifax who have just been given the count with the seemingly stingy tracker rate increases announced earlier this afternoon. By the time the week's out we could see another 5-year fixed starting with a 3, but perhaps at a more generous loan-to-value than 60%.
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Iain Swatton
Director at Exemplar Financial Services
Santander has fired the starting gun, becoming the first major lender in 2025 to go sub-4% on 2- and 5-year fixed mortgages. With rates at 3.99% for 60% LTV, this move could be the catalyst the market needs after a hesitant start to the year. Lenders have been cautious, with rates fluctuating both up and down—but this bold move by Santander might be the push needed to get things moving. Alongside their 0.40% reductions across a large number of products and new buy-to-let options, we could be looking at the start of a full-scale mortgage price war. With competition heating up, other lenders will no doubt follow suit—great news for borrowers looking for a better deal.
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Ben Perks
Managing Director at Orchard Financial Advisers
Santander have come out swinging and just smashed through the 4% barrier. Brokers and borrowers across the country will be punching the air and racing to lock in deals. As swaps continued to drop this week, it was only a matter of time before one of the big boys released a sub-4% rate. Here it is, and fair play to Santander who have shown a real appetite for lending by improving multiple products across the range. More lenders will almost certainly follow. With Santander going sub-4%, the 2025 rate war is back on the table.
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Tony Castle
Managing Director at PFG Mortgages
Santander leads the way in 2025 by becoming the first mainstream lender to offer sub-4% mortgage deals. This will make homeownership considerably more affordable for many people. This assertive and bold move proves they’re not just about banking, they’re about helping you unlock your dream home without the nightmare of sky-high mortgage rates.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Santander’s bold move to offer sub-4% mortgage rates marks a significant moment for borrowers and the wider mortgage market. This is fantastic news for homebuyers and those looking to remortgage, providing much-needed affordability and stability. With rate cuts across more than 80 mortgage products and greater flexibility for buy-to-let investors, Santander is setting a competitive tone for 2025. It’s encouraging to see a major lender leading the charge at a time when many homeowners and buyers are looking for relief from higher borrowing costs.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This is a slamdunk from Santander. It's also a major boost to the property market. Mortgages being sub-4% is a symbolic milestone and will create confidence among prospective buyers and those looking to move home. Yes, the rates will only be available to those with bigger deposits or more equity but for mortgages to breach the 4% barrier shows rates are headed in the right direction once again.
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Rohit Kohli
Director at The Mortgage Stop
Santander’s sub-4% mortgage launch highlights a stark contrast with Halifax’s decision to increase tracker margins. While Halifax is nudging borrowers toward more expensive fixed-rate options, Santander is taking a bold step to drive competition and restore affordability in the market. This move will be welcomed by buyers and remortgagers, particularly after months of high-rate stagnation. Halifax’s tracker margin increase may be seen as out of step with what borrowers need right now—hopefully, Santander’s strategy puts pressure on them and others to follow suit with more borrower-friendly options.
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Justin Moy
Managing Director at EHF Mortgages
It's been a few months since we have seen a sub-4% residential deal. This is excellent news for borrowers, and the market as a whole. Others lenders will have no option but to follow, so we should see plenty of competition and improved rates on the high street over the coming days. With up to 0.40% shaved off the fixed deals, those looking for a new mortgage deal in the next 6 months will be clambering for these new options.
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Jack Tutton
Director at SJ Mortgages
Santander are taking a major step for the mortgage market by becoming the first lender to offer a fixed rate product back under 4%. Borrowing rates for lenders have been falling over the past few weeks meaning reductions in fixed rates were expected, however this is a significant move by Santander and it will be interesting to see how their competitors react. This is be a welcome boost to the many mortgage holders who are coming off their current product this year.
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Dariusz Karpowicz
Director at Albion Financial Advice
Santander has boldly stepped into 2025 by smashing through the 4% barrier, marking a pivotal moment in the mortgage market with their new 3.99% fixed-rate offerings. This aggressive move, coming just as Halifax raised their tracker margins, shows Santander isn't just dipping their toes in the water – they're making quite the splash with rate cuts across more than 80 products.
The timing couldn't be more symbolic, offering a beacon of hope for borrowers after months of rate stagnation. While the headline-grabbing 3.99% deals come with a chunky £1,999 fee and require a 40% deposit, this is likely just the opening salvo in what could become a full-scale mortgage price war. With other lenders almost certainly preparing their responses, we might soon see even more competitive rates at higher loan-to-value ratios, making homeownership more accessible across the board.
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Riz Malik
Independent Financial Adviser at R3 Wealth
As Valentine's Day approaches, a lot of people will remember their first, and that is what Santander is hoping to capitalise on. They won't be the last, but there won't be a race to the bottom.
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Ken James
Director at Contractor Mortgage Services
This is a masterclass from Santander in how to reinvigorate interest and get a buzz back in the market. It puts Halifax to shame with their recent tracker increase announcement. Rates dropping under the 4% mark will certainly create a sense that the wheels on the bus have not yet fallen off, this could be the stone thrown into the lake that starts to create the ripple. Will this be a rallying call to arms with other lenders dropping below 4% as the week progresses?