Mortgages  

Santander follows Nationwide’s 95% LTV lead

Santander follows Nationwide’s 95% LTV lead

Just days after Nationwide announced they would offer 5 per cent deposit mortgages outside the limits of a government scheme, Santander has unveiled similar 95 per cent loan-to-value plans.

From 29 September, Santander will lend at that level without the assistance of the Help to Buy mortgage guarantee scheme.

The government scheme is due to finish in 2016, with Santander bosses looking to signal their early commitment to lending for those with a 5 per cent deposit beyond the term of the scheme.

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Miguel Sard, managing director of mortgages at Santander, said: “The government’s guarantee scheme has been successful in encouraging lenders to re-enter the 95 per cent LTV space and in giving confidence to prospective borrowers who don’t have a large deposit.

“After almost two years’ lending in the scheme and given the quality of loans issued over the period, we’re ready to extend our commitment to lending up to 95 per cent LTV without the need for government support.”

From the end of the month, all new applications above 90 per cent LTV will be undertaken as a standard Santander mortgage and no customers will be impacted, as the new policy for loans up to 95 per cent LTV is based directly on the Help to Buy two policy.

Santander will stop taking Help to Buy two applications on 28 September, and all applications submitted by this date will still proceed as HTB2.

Yesterday (10 September), Nationwide started offering fixed rate 95 per cent loan-to-value mortgages starting at under 4 per cent, offered both through brokers as well as direct.

This is the first time the lender has offered 5 per cent deposit mortgages outside the limits of a scheme to all customers since 2008.

Rates for Nationwide’s deals start from 3.99 per cent with a £999 fee for the two-year fixed rate deal. There are also three and five-year fixed rate deals, starting at 4.59 per cent and 4.79 per cent respectively.

At the current time, Santander has yet to make an announcement on their 95 per cent LTV rates.

emma.hughes@ft.com