Santander UK has today reduced fixed rates on selected residential purchase mortgages, remortgages, buy to let, and product transfers by between 0.02% and 0.25%. The rate changes include 60% LTV two year fixed rate residential purchase mortgage with a £999 product fee is now priced at 4.99%, down from 5.14%.

The rate changes also include 75% LTV two year fixed rate residential purchase mortgage with a £999 product fee is now priced at 5.09%, down from 5.24% and 90% LTV two year fixed rate residential purchase mortgage with a £999 product fee is now priced at 5.61%, down from 5.70%.

Santander has also changed its reversion rate from its Follow-on Rate (FoR) to its Standard Variable Rate (SVR) for applications made from today onwards. But Ben Tadd, director at Chippenham-based broker, Lucra Mortgages, said the latest cuts had the potential to inject impetus into the market: “This latest round of rate reductions spells further good news for prospective purchasers and will help to inject some confidence into the market that mortgage payments on the whole are becoming more affordable across the board.

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"Those would-be buyers who are keen to move but have been reluctant to act because of soaring rates now have their ears pricked up at the sound of rates tumbling further. As the rate war rumbles on with lenders competing for market share, this will help inject real impetus into the property market with purchase transactions likely to be on an upward trajectory.”

Elliott Culley, director at Hayling Island-based broker, Switch Mortgage Finance, concluded: “Competition continues to heat up between mortgage lenders as swap rates continue to fall. More lenders are now bringing out 2-year fixed rates under 5%, which is great news." Michelle Lawson of Lawson Financial said: “It is great to see the competition and the drive for lenders to attract business in the lower loan to value tiers. It would be even better to see this spread amongst the greater risk 90-95% loan to value brackets so hopefully the confidence will continue and this will help first-time buyers get back into the market which is much needed.”