Santander has announced reductions to a range of its 2 and 5-year fixed residential remortgage products, with brokers interpreting the move as a signal that lenders are increasingly confident a Bank of England base rate cut could be imminent.
The changes, effective from Monday, see cuts of up to 0.16% on 2-year fixed remortgage deals and up to 0.10% on 5-year fixed rates for customers with 60-75% loan-to-value (LTV). Product transfer rates for existing Santander customers will also fall, with reductions of up to 0.13% across 2-year fixes and 0.10% on 5-year terms.
The lender’s headline offer is now a 60% LTV 2-year fixed remortgage at 3.84% with a £999 fee, representing one of the most competitive rates currently on the market.
Brokers say the timing of the rate reductions is no coincidence. Ken James, Director at Contractor Mortgage Services, suggested that lenders are positioning themselves to capitalise on a likely drop in the base rate, possibly as early as August.
“This is a calculated move by Santander,” James said. “The reductions, although modest, are strategically timed. They’re likely aimed at capturing a larger slice of the remortgage market, especially as a wave of fixed-rate deals come up for renewal this summer.
“This decision reflects growing confidence among lenders that the interest rate peak has passed and that we may be edging closer to a rate cut by the Bank of England.”
The central bank has held rates steady at 4.25% since May but a softening inflation outlook has fuelled speculation that a cut could be on the cards in the coming months.
Mike Staton, Director at Staton Mortgages, welcomed the move, calling it a sign that Santander is “back in the mix” as a serious competitor.
“Post-Covid, Santander weren’t offering anything particularly niche or competitive,” said Staton. “Now they want to be back in the game and are throwing around some market-leading deals. This also reflects their confidence in the direction of travel on rates, and borrowers will be hoping they’re right.”
Elliott Culley, Director at Switch Mortgage Finance, said the lender’s strategy appeared to focus on capturing high deposit borrowers as the remortgage market ramps up.
“2025 is shaping up to be a big year for remortgages, and it’s no surprise to see Santander doubling down on this part of the market while uncertainty continues in other areas,” Culley said.
Daniel Hobbs, CEO of New Leaf Distribution, described the move as a welcome lifeline for borrowers and a possible catalyst for wider lender competition.
“The market desperately needs an injection of life,” Hobbs said. “Santander’s move could spark a domino effect that encourages more lenders to follow suit, which would be great news for consumers.”
With the base rate decision expected on 1 August, all eyes will now turn to how other lenders react—and whether Santander’s move proves to be the first of many.