Santander is targeting first-time buyers with a cashback scheme on high loan-to-value products.
The lender has launched a £500 cashback and free valuations on its two 95 per cent LTV fixed rate products.
The two-year fixed term is a 2.99 per cent rate while the five-year fixed is at 3.39 per cent. Both have no product fee.
Miguel Sard, managing director of Santander Mortgages, said: “We know a lot of first-time buyers opt for two and five-year fixed rate mortgages.
“By offering free valuations and introducing £500 cashback, we hope to give customers a helping hand towards the cost of kitting out their dream home.”
The lender has also reduced rates on it’s 60 per cent and 75 per cent LTV products.
Those with a 40 per cent deposit can expect a two-year fixed, with a £999 product fee, at 1.44 per cent — a reduction of 0.05 per cent. Without the fee, the rate increases to 1.74 per cent.
The bank’s five-year fixed 75 per cent LTV products have also been reduced.
With a £999 product fee, the rate has decreased by 0.10 per cent to 1.89 per cent. Without the fee, a 0.5 per cent drop takes the rate to 2.09 per cent.
Santander Mortgages has also introduced a 10-year fixed rate at 2.39 per cent for those with a 40 per cent deposit and a £999 fee, available for purchase and remortgage.
Shaun Church, director at Private Finance, said: "I think it’s an excellent idea to reach out to first-time buyers and it’s really good to see a mainstream lender supporting that area of the market.
“It’s difficult enough to get on the ladder so any extra cost reductions are very welcome. The £500 could go towards solicitor or moving costs.”
Mr Church also said Santander’s rates were very competitive in the current market, especially the 10-year fixed at 2.39 per cent.
He added: “All the rates are super competitive. With increased competition, the consumer is the winner. Other firms will have to come out and compete with low rates too.”