Santander is cutting most of its residential and buy-to-let mortgage rates for new customers on Monday, with reductions of up to 36 basis points on some deals.

The lender is also lowering some of its product transfer rates and launching new large loan options.

It follows rate reductions at other major lenders, Barclays and HSBC, earlier this week.

Within Santander’s new business range, all 60% and 75% LTV three-year fixed rates will reduce by up to 36bps.

For new customers moving home, 60%, 75%, 85% and 90% LTV two- and five-year fixed rates will reduce by up to 21bps.

For first-time buyers, including those purchasing new-builds, all 85% and 90% LTV two and five-year fixed rates will reduce by up to 16bps.

In its new business range for remortgage, all 60%, 75%, 85% and 90% LTV two and five-year fixed rates will fall by up to 13bps.

Prices will also drop on some product transfer deals, with residential rates cut by up to 8bps and buy-to-let by up to 9bps.

New large loan remortgage deals are launching with minimum loans from £500,000 up to a maximum of £5million.

Rates start from 3.73% and fees from £1,999.

L&C Mortgages associate director David Hollingworth says: “There are early positive signs for mortgage rates after the rate of inflation for September held steady, undershooting expectations.

“Hopes that inflation may have peaked at a lower level than expected have opened the door to a reduction in the Bank of England base rate before the end of the year. 

“As market forecasting has improved, swap rates have fallen further which should give lenders the chance to improve their fixed rates.

“We know that once there are moves from some of the big lenders, it will inevitably lead to others following suit.  

“If the more positive outlook in the markets holds firm we could see another series of repricing moves that will cut fixed rate pricing.

“However, with the Budget to come it’s hard to predict where sentiment could head from here.  

“That’s already brought some borrower anxiety into play and so there’s still a strong case for taking a rate now and keeping a close eye on market movement from here.  

“That will give security but still allow a jump to a lower rate before completion if we see further improvements.”