4.28% five-year fix mortgage rate available through Santander for Intermediaries

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Santander for Intermediaries is offering one of the most competitively priced longer-term mortgages at 4.28%. 

The 4.28% mortgage is fixed until 02 November 2029 and is available to borrowers purchasing a property. Applicants will need a 40% deposit to qualify and the product has a £999 arrangement fee.

The rate is available for mortgages between £6,000 and £3 million and early repayment charges apply. After the fixed period, the mortgage reverts to the lender's current 7.5% standard variable rate and the overall cost for comparison is 6.4% APRC representative.

Aaron Strutt, product director at Trinity Financial, says: "Santander's lowest five-year fixed remortgage rate is 0.14% more expensive than its property purchase rate. If you want a two-year fixed mortgage through Santander, the price is about 0.5% higher than the five-year fixes.

"There seems to be a lot of pent-up demand in the property market at the moment but many borrowers want rates closer to 4%. Santander's 4.28% five-year fix undercuts many of its competitor's longer-term fixes, although borrowers need a large deposit to access the mortgage."

The Bank of England's MPC voted to keep the base rate at 5.25% again for June, but we seem to be getting closer to a rate cut. According to Arbuthnot Latham Private Bank, "the probability of a rate cut in August sharply increased to 60%. The market continues to price in around 0.45% of rate cuts this year from the Bank of England, Federal Reserve and European Central Bank, respectively."

What mortgage income multiples is Santander using?

Santander uses mortgage affordability calculations to determine the maximum loan size, although the lending figures are based on standard income multiples.

The table below shows Santander's maximum income multiples. Income may be a combination of primary and secondary incomes:

  Capital and Interest Interest Only
Combined income for all applicants Loan To Value (LTV)
75% LTV or less Over 75% to 85% Over 85% 75% or less Over 75%
Less than £45,000  4.45x 4.45x 4.45x 4.45x 4.45x
£45,000 to £99,999 5.00x 5.00x 4.45x 4.45x 4.45x
£100,000 or more 5.50x 5.00x 4.45x 5.50x 5.00x

Source: Santander for Intermediaries

Does Santander issue interest-only mortgages?

Yes, Santander has a generous interest-only mortgage policy. For new customers and existing borrowers, no minimum income is required. Where any part of the mortgage is on interest only, and the combined gross income is less than £100,000, the maximum income multiple is 4.45x income unless the application is for a remortgage without capital raising.

Where any part of the mortgage is on an interest-only basis the maximum loan-to-value for the overall lending is 85%. Where there’s a combined gross income of £200,000 or more, any borrowing over 75% loan-to-value must be on a capital and interest basis. For applicants with a combined gross income of less than £200,000, lending over 50% loan-to-value must be on a capital and interest basis.

Representative example: A capital and interest mortgage of £300,000 payable over 30 years, initially on a fixed rate basis at 4.28% and then on the lender's 7.50% standard variable rate for the remaining 28 years. The 4.28% rate would require 63 monthly repayments of £1,479.84 followed by 297 payments of £2,008.48. The total amount repayable would be £691,157.23 made up of the loan amount, plus interest £391,313.98) and £999 (product fee), £225 (final repayment charge), £35 (completion fee). The overall cost for comparison is 6.4% APRC representative.

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation

The information contained within was correct at the time of publication but is subject to change

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