Santander launches new remortgage rates from 4.38% for mortgages between £500,000 and £2 million

Santander for Intermediaries has launched new large-loan remortgage rates for borrowers with mortgages between £500,000 and £2 million, strengthening its position in the competitive high-value mortgage market.

In recent months, mortgage lenders have continued to offer more competitively priced property purchase rates, but with so many homeowners due to remortgage this year, Santander is clearly seeking to increase the number of remortgage applications it receives. 

The new deals are aimed at remortgage customers with larger loans and significant home equity. They are likely to appeal to homeowners in London and the South East, as well as to those across the UK with higher-value properties who are coming to the end of a fixed rate and want to secure a competitive new deal.

Santander’s new large-loan remortgage rates

Santander’s new large-loan remortgage products include:

The new 4.38% two-year fixed rate is lower than Santander’s equivalent £0 product-fee deal at around 4.70%, making it attractive for borrowers with larger mortgages. The trade-off is the £1,499 product fee, so borrowers need to compare the total cost rather than just the headline interest rate. Many homeowners prefer lower monthly repayments and the option to make overpayments, which is a straightforward process with Santander. 

For larger loans, the lower rate may produce meaningful monthly savings, particularly where the mortgage is close to £1 million or £2 million. However, the most suitable option will depend on the mortgage size, term, repayment method and whether the borrower wants to pay the fee upfront or add it to the loan.

Is the Santander three-year fixed rate worth considering?

Santander’s three-year fixed rates may appeal to borrowers who want longer payment certainty than a two-year fix but do not want to commit to a five-year deal.

The sub-4.6% three-year fixed rate with a £1,499 fee gives larger-loan borrowers another competitive option. A three-year fix can work well for borrowers who want to avoid remortgaging again in just two years, while still keeping more flexibility than a five-year fixed rate.

Santander also has a three-year fixed option with a £999 fee for mortgages between £500,000 and £2 million. Borrowers should compare the rate, fee and total cost over the fixed period before deciding which product is better value.

Nationwide for Intermediaries has just lowered its three-year remortgage rates, which are slightly cheaper than Santander's. 

How do Santander’s remortgage rates compare with the mortgage market?

Santander’s new large-loan remortgage products are competitive because the cheapest rates are usually reserved for borrowers with larger deposits or more equity. These products are available at 60% loan-to-value, meaning borrowers need at least 40% equity in the property.

HSBC, Barclays, Nationwide, NatWest, Halifax, Coventry Building Society and other lenders have also been competing for remortgage business, with several banks lowering fixed rates recently.

However, Santander’s large-loan range is particularly relevant to borrowers with mortgages of at least £500,000 who want mainstream-bank pricing rather than a private-bank mortgage.

Aaron Strutt, product director at Trinity Financial, says:

“Santander’s new large-loan remortgage rates are a welcome addition for borrowers with mortgages between £500,000 and £2 million. The 4.38% two-year fixed rate with a £1,499 fee looks competitive, particularly when compared with the approximate 4.70% fee-free option.  The lenders offer lower loan sizes as well as a range of product fees. 

“The three-year fixed rates are also worth considering because many borrowers want more certainty than a two-year deal but do not necessarily want to lock in for five years. They are not as popular as two- or five-year fixes, but they are still a good option for many borrowers. 

“For larger mortgages, the product fee is important, but the lower rate can sometimes save enough over the fixed period to make the fee worthwhile. Borrowers should compare the total cost, not just the headline rate. The right option depends on the loan size, repayment method, future plans and how long the client wants certainty for.”

Should borrowers choose a two-year or three-year fixed rate?

A two-year fixed rate may suit borrowers who think mortgage rates could fall and want to review their options again sooner. A three-year fix may be better for borrowers who want a little more certainty and do not want to arrange another remortgage in 24 months. It is worth remembering there are still some sub-4% tracker rates. 

Borrowers should also consider whether they plan to move, repay part of the mortgage, switch lender or make changes to their borrowing. Early repayment charges, product fees and total cost should all be reviewed before choosing a deal. There are lots of lenders offering flexible mortgages without early repayment charges. 

Representative example: A mortgage of £500,000.00 payable over 29 years. Initially, the mortgage has a fixed interest rate of 4.38% for the first 26 months, requiring 26 monthly payments of £2,537.53. After this initial fixed period, the interest rate reverts to a variable rate of 6.5% for the remaining 322 months, with monthly payments of £3,155.26. The total cost during the initial fixed period would be £65,725.78 (including interest and fees), and the total amount payable over the full term would be £1,081,719.50. This consists of the original loan amount (£500,000.00), total interest (£579,995.50), and fees (£1,724.00).

Speak to Trinity Financial

Trinity Financial’s brokers can compare Santander’s new large-loan remortgage rates with fixed and tracker deals from other major banks and building societies.

If your current mortgage deal is ending within the next six months, it is worth reviewing your options early. Many lenders allow borrowers to secure a new rate in advance, and in some cases, it may be possible to switch to a better deal if rates fall before completion.

Call Trinity Financial on 020 7016 0790, book a consultation, or complete our mortgage questionnaire.

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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