Santander, HSBC, and TSB cut interest rates on range of mortgages

High street banks have started to cut interest rates on a variety of mortgage products after a year of persistently high rates and hesitant lenders. But this week, Santander, HSBC, and TSB have all started to offer a larger number of mortgages, with better deals for potential homeowners.

Interest rates have remained stubbornly high since August last year but from this week, consumers will start to see greater competition between lenders as a range of two and five-year fixed mortgages have their interest rates cut. For example, Santander's new five-year fixed rate is dropping as low as 4.79 per cent on 85 per cent loan-to-value (LTV) mortgages, while rates on 90 per cent LTVs are dropping a quarter of a per cent to 4.99 per cent.

The new range of lower interest mortgage deals follows last month's changes to the bank's affordability criteria, which were expanded to take into account changes to the High Income Child Benefit Charge, which allows people on higher incomes to keep more Child Benefit. This means that more families claiming child benefit will be able to meet the criteria to get their first foot on the housing ladder.

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Remortgagers will also start to see better rates, with 85 per cent LTV mortgages falling to 5.58 per cent at Santander, while 90 per cent LTVs are down to 5.78 per cent, though these both come with a £999 upfront fee. But first-time purchasers and those remortgaging will want to shop around, as other lenders have gone as low as 4.24 per cent on some mortgage products.

Those with more cash upfront can take advantage of HSBC's five-year fixed 60 per cent LTV deal, which has a 4.24 per cent interest rate. The