For the first time in months, mortgage rates are set to drop below 4%. A major lender is launching new fixed-rate deals at 3.99% this Thursday, marking a possible opportunity for borrowers. But what does this mean for you, and how do you know if it’s the right deal? Let’s break it down in detail.
What’s Happening with Mortgage Rates?
Santander is introducing a 3.99% fixed-rate mortgage this week. This applies to both two-year and five-year fixed deals, but borrowers will need a 40% deposit or equivalent home equity to qualify. This marks a new shift in the mortgage landscape, potentially paving the way for lower rates across the board.
However, it’s important to note that this Santander product comes with fees, meaning that while the rate is low, it may not be the cheapest option overall. Borrowers should consider the total cost of the mortgage, including arrangement fees, valuation costs, and potential early repayment charges. This is why using a broker is valuable—we can assess this deal against other options and provide tailored advice on what’s best for your situation. The lowest interest rate does not always equate to the best deal in the long run, especially if significant fees are attached.
Who Benefits Most from This Deal?
This sub-4% mortgage rate is particularly beneficial for:
✔ Homeowners looking to remortgage – Those with at least 40% equity could secure a lower rate before potential market changes. Many homeowners who fixed their rates during the peak of rising interest rates may find this an attractive opportunity to refinance at a more affordable level. ✔ Buyers with large deposits – First-time buyers and movers with a 40% deposit can take advantage of these rates, giving them the chance to secure a competitive deal with lower monthly repayments compared to previous higher-rate offerings. ✔ Borrowers coming off fixed-rate deals – If your current mortgage is ending soon, this could be a prime opportunity to secure a competitive rate before any unexpected shifts in the market.
If you don’t have a 40% deposit, don’t worry—other lenders may soon introduce competitive rates for lower deposit levels. Historically, when lenders introduce market-leading deals, they often follow up with other variations, such as 85% and 90% loan-to-value (LTV) products.
Will Mortgage Rates Keep Dropping?
There is growing optimism that mortgage rates may continue to improve, especially with expectations of further Bank of England base rate cuts later this year. If inflation continues to ease and economic conditions remain stable, we could see even lower mortgage rates introduced by a wider range of lenders.
That being said, waiting isn’t always the best strategy. Mortgage deals can disappear quickly, and the best rates are often short-lived due to high demand. Lenders frequently introduce limited-time deals that may only last a few weeks before being pulled from the market. Locking in a rate now could provide stability, especially if your current deal is expiring soon. Additionally, many lenders offer rate lock options, allowing borrowers to secure a competitive deal in advance of their remortgage or purchase completion.
There is also the possibility that demand for mortgages will increase, putting upward pressure on rates again. As affordability improves with lower rates, more buyers may enter the market, creating competition that could slow or even reverse the rate decline. Timing is crucial, and expert guidance can help you make the best decision.
How Can You Find the Best Deal?
With rates fluctuating, comparing available deals is crucial. This 3.99% mortgage might be ideal for some, but the best way to determine your options is to speak to a mortgage broker. A broker can assess not only the headline rate but also the associated fees, terms, and conditions to ensure you get the most cost-effective mortgage for your needs.
At Quick Mortgages, we offer fee-free expert advice, helping you navigate the latest deals to find the right mortgage for your situation. We compare thousands of products across multiple lenders, ensuring you don’t just get the lowest rate but the best overall deal tailored to your financial goals. Whether you’re looking to remortgage, buy your first home, move up the property ladder, or invest in property, we’re here to help.
🔹 Why choose a broker?
- We provide whole-of-market access, meaning you get deals from a wide range of lenders, not just one.
- We consider the total cost of the mortgage, not just the interest rate.
- We handle the application process for you, reducing paperwork and saving you time.
- We can identify lender criteria that suit your unique financial circumstances, avoiding unnecessary declines.
📅 Get in touch today—let’s see what’s possible for you!
With the mortgage market changing rapidly, acting now could save you thousands over the term of your mortgage. Speak to us today for personalised advice and expert support on securing the best possible deal.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
