The lender’s current lowest rate of 3.51% means there has been a fall of 0.56% in rates from 1 January 2025 when the bank’s lowest rate was 4.07%.

The newly reduced rates are available to customers applying via broker or directly, under Santander’s ‘no dual pricing’ pledge.

For home movers, Santander has launched new 60% and 75% loan-to-value (LTV) two and five year fixed products starting from 3.51% with a £1,999 fee. These have a minimum loan size £500,000.

Selected 75% to 90% LTV five-year fixed rates have also been cut by up to 0.03%, with rates starting from 3.65%.

Also, first-time buyers’ products have been lowered, including all 85% and 90% LTV two year fixed rates, which have been lowered by up to 0.15%, with rates starting from 4.06%.

Selected remortgage rates at 60% to 90% LTV five-year fixed rates have been trimmed by up to 0.03% to start from 3.99%.

Meanwhile, new build home mover and first-time buyer rates have been cut by as much as 0.15%.

Santander has trimmed prices on its BTL purchase rates at 60% to 75% LTV two-year fixed rates have been reduced by up to 0.08%, with rates now starting from 3.74%, while the five-year fixed equivalent rates have also been cut by 0.08% to start from 3.93%.

In addition, all BTL remortgage products at 60% to 75% LTV five-year fixed rates have been reduced by up to 0.09% to start from 3.85%.

Santander for Intermediaries head Graham Sellar says: “2025 has been the year of the buyer, with rate reductions and affordability improvements helping more buyers take that first step onto or move up the property ladder.”

“We’re pleased that our final rate change of 2025 continues this positive trend for buyers with reductions across the board and our lowest on sale rate of the year to support buyers into January with a new year, new home hunt.”

Elsewhere, Barclays has also announced rate decreases.

The bank has lowered remortgage rates on its two-year fixed product at 60% LTV with a fee of £999 from 3.81% to 3.71%. This has a minimum loan of £5k and a maximum loan of £2m.

Also, the Great Escape two-year fixed at 75% LTV with no fee has been lowered from 4.17% to 4.12%. This has a minimum loan of £50k and a maximum loan of £2m.

The five-year fixed at 75% LTV with a fee of £999 has been lowered from 3.92% to 3.88% and has a minimum loan of £5k and a maximum loan of £2m.

For Barclays’ existing customer reward ranges, the EMC Reward two-year fixed at 75% LTV and a fee of £999 will be trimmed from 3.92% to 3.81%.

In the same range, the EMC Reward five-year fixed product with no fee at 75% LTV has decreased from 4.10% to 4.04%.

Both of these have a minimum loan of £1k and maximum loan of £2m.

Finally, NatWest has made rate cuts across its new business, existing customer and additional borrowing ranges.

The bank has made decreases of up to 9 basis points on its two-year fixed rate purchases including the 60% LTV with a fee of £995 which has been cut from 3.76% to 3.67% and the 60% LTV with a fee of £1,495 which has been lowered from 3.71% to 3.62%.

Five-year fixed rate purchases have also been reduced including the 90% LTV with no fee from 4.42% to 4.33% and the equivalent product with a fee of £995 from 4.29% to 4.20%.

NatWest has also cut remortgage rates. The two-year 60% LTV with a fee of £995 has been lowered from 3.79% to 3.71% and the two-year 60% LTV with a fee of £1,495 has been cut from 3.74% to 3.66%.

In addition, the five-year fixed remortgage products at 60% have been lowered by as much as 7bps.

BTL two-year fixed rate purchase products at 75% LTV have decreased by 8bps to 3.29% and have a product fee of £3,999 while BTL five-year remortgage rates at 60% LTV have been cut by 3bps to 3.52% and have a product fee of £5,999.

NatWest is also lowering prices on first-time buyer, shared equity, Help to Buy shared equity, green, green BTL and standalone additional borrowing.

Commenting on the latest cuts, John Charcol mortgage technical manager Nicholas Mendes says: “Santander’s move to 3.51 per cent has very clearly set the pace, and at the moment it is the standout cheapest option for borrowers taking £500,000 or more, once fees are factored in.”

“Nationwide’s 3.58 per cent sits just behind it, which shows how tight the spread has become at the top end of the market. This is textbook competitive positioning from the big lenders, and it signals a deliberate push to capture low-risk, high-equity borrowers before activity ramps up in the new year.”

“We’re now seeing the first signs of a full-scale price war. NatWest and Barclays have both given notice of further reductions landing tomorrow, and the speed at which these updates are coming through tells you lenders want to be front of mind ahead of the next Bank of England decision.”

“With swaps holding steady and market pricing pointing towards cheaper funding conditions, the high street is clearly preparing for stronger demand in early 2026.”

“For borrowers, it is a good moment to secure a deal rather than assume this pace of cuts will continue uninterrupted. If we do not see a Bank Rate reduction next week, or if the voting behaviour on the MPC shifts in a more hawkish direction, markets will quickly readjust their expectations.”

“That would feed straight back into swaps and could slow or even stall the reductions we are currently seeing. Acting now gives you the benefit of today’s pricing without relying on sentiment staying this favourable.”

Last week, Nationwide cut its fixed rate mortgage range. The lowest rate now stands at 3.58% and it is the first time that Nationwide has offered a fixed mortgage rate lower than 3.60% since September 2022.