One of the major tasks you’ll want to consider when buying property (unless you are a cash buyer) is securing a mortgage deal. Santander is a popular provider in the UK and has all sorts of mortgage products to suit your needs. 

Good to know about Santander

Santander is one of the largest UK mortgage providers, making up around 11% of the mortgage market in 2019. They’re top-rated lenders for first-time buyers or those looking to remortgage. In fact, they won the Your Mortgage awards for best first-time buyer mortgage lender in 2019/2020 and best remortgage lender in 2020/2021. 

Among the benefits of taking out a mortgage with Santander include the fact they:

  • Offer £250 cashback or free standard legal fees on most of their mortgage products

  • Provide free standard valuations (a valuation of your property to estimate its worth) with certain mortgages 

  • Feature easy mortgage management using Santander’s online and mobile banking services

  • Have transparent fees, including a one-time account fee for managing your mortgage, which you can pay either at the end or beginning of your mortgage period

What kinds of mortgages does Santander offer?

Whether you’re buying your first home, remortgaging your current property or looking to move house, Santander offers a range of mortgages. This includes:

Buy-to-let mortgages

Suppose you’re considering buying another property to rent out for extra income. In that case, you’ll want to secure a buy-to-let mortgage. Santander buy-to-let mortgages are available to those who pass the following criteria:

  • You already own a residential property that is used as your primary residence

  • You earn at least £25,000 a year

Note that if you’re purchasing a buy-to-let with someone else, only one of you needs to pass the criteria. You’ll also need to make sure the property is worth more than £75,000 but less than £750,000.

Shared ownership mortgages 

Shared ownership schemes are popular with first-time buyers and allow them to buy a share in a property from a housing association. You’ll then have a mortgage just for your share and pay rent for the portion of the property you don’t own. There’s also the option of increasing your ownership share in the future. 

Santander is one of the few mortgage lenders that provide mortgages for shared ownership customers. There are a few rules to note, though. For instance, you can only borrow up to 90% of your share amount, which could drop to 75% on some buildings (notably new builds). 

Suppose you’re thinking of buying through a shared ownership scheme and want a Santander mortgage. In that case, you must buy through one of the following providers:

  • Homes & Communities Agency (or Homes England)

  • Welsh Assembly

  • Scottish Housing Regulator

  • Northern Ireland Co-Ownership Housing Association (NICHA)

  • Northern Ireland Housing Executive (NIHE)

Interest-only mortgages

A Santander interest-only mortgage is when you only pay monthly interest repayments on your loan rather than the actual loan itself. 

While your monthly repayments will work out a lot less, you will eventually have to pay back the full loan in a lump sum at the end of your mortgage term. Santander offers these types of mortgages; however, note that the maximum amount you’ll be able to borrow is only up to 50% of your property’s total value. 

Remortgages

If you’re not happy with your current mortgage terms or reckon your property may have changed in value, you may want to consider remortgaging.

Santander offers remortgages to both existing customers and new ones. As part of the process, your home will be valued to ensure your mortgage amount matches up to its worth. With a Santander remortgage, they’ll offer valuations free of charge. 

How much can I borrow with a Santander mortgage?

How much you’ll be able to borrow from Santander will depend on a few factors, from your credit score and any debt you might have to your income and even your age. As a general guide, you should be able to borrow between 4.45 and 5 times your annual salary. 

Note that how much a lender is prepared to give will depend on your loan to value (LTV) ratio. This is the percentage of your property’s worth that a mortgage or bank will loan you. Santander typically offers 60%, 75%, 85% and 90% loans, although they will be introducing 95% loans to first-time buyers from April 2021. 

Remortgaging your home, either as a new customer or an existing customer at Santander? This could also affect how much you’ll be able to borrow. You’ll be able to get a clearer idea of what Santander might lend you using our mortgage calculator

Santander mortgage rates

When you take out a mortgage for a property, your monthly repayments include interest. Your rate (meaning interest rate) will differ depending on which type of mortgage you choose. When it comes to Santander mortgage rates, there are five types to consider:

Santander fixed-rate mortgage

Fixed-rate mortgages are essentially when your interest rate remains the same for a set number of years (known as your mortgage term). They’re a good option if you want to know your payments for the near future.

At Santander, you can usually fix your rate for 2, 3, or 5 years. Once your deal ends, you’ll automatically switch to their Follow-On rate or variable rate depending on how long you’ve had your mortgage.

Santander tracker-rate mortgage

A tracker-rate mortgage is when the interest rate is tracked against the Bank of England Base Rate. This is an interest rate set by the Bank of England’s Monetary Policy Committee, which can be affected by inflation. 

The Bank of England Base Rate can go up and down at any time, although you’ll usually get notified if this is the case. Santander’s tracker rate mortgages track just above the Base Rate. They are attractive if it’s expected to stay low for a while. Again, they tend to have 2, 3, or 5-year terms; after this, you’ll switch to the variable or Follow-On rate.

An added benefit of a tracker mortgage is that you’ll be able to make unlimited overpayments (extra payments on your mortgage) without paying early repayment fees.

Santander Lifetime tracker rate mortgage

If you want to select a mortgage rate and then forget about it, a Santander Lifetime tracker rate could be ideal. This is when your interest rate is fixed just above the Bank of England Base Rate for the entire lifetime of your mortgage term. 

Your interest rate could end up decreasing depending on the Base Rate. You’ll also be able to make unlimited overpayments, meaning you might end up paying off your mortgage faster.

Santander variable-rate mortgage

This sort of mortgage rate is what you might switch to at the end of your fixed-rate term. The variable rate is set by Santander and is not affected by the Bank of England Base Rate. 

Only customers who took out their mortgage with Santander before 23 January 2018 will be switched over to this. New customers or those who took out a mortgage after this date will be transferred to a Follow-On rate.

Santander Follow-On rate mortgage

Suppose you’ve taken out a mortgage with Santander after 23 January 2018. In that case, you’ll automatically switch to a Santander Follow-On rate (FOR) mortgage at the end of your term. This is also a type of variable rate; however, it’s directly linked to the Bank of England Base Rate and will go up and down accordingly. 

Moving home

Already have an existing Santander mortgage, but thinking about selling up? If you’re happy with your mortgage terms and don’t want anything to change, you might be able to take it with you.

This is known as porting your mortgage. Whether you’re able to do this through Santander will depend on your mortgage type and whether you want to borrow the same amount or more/less. If you port less for your new home than you were borrowing on your previous property, you might need to cover repayment charges.

It’s also still possible to port your mortgage if your selling and buying dates don’t quite match up – you’ll just need to complete the deal on your new home within 3 months of selling your old one.

Santander mortgage holidays

If your circumstances change and you find yourself struggling to cover your monthly mortgage payments, you might be able to apply for a holiday. This is an agreement you make with your mortgage provider to temporarily suspend or lower your payments each month. 

Santander mortgage holidays can be taken for up to 3 months (6 months for some customers), and there’s no extra fee to do this. You will continue to rack up interest on your mortgage during this holiday period, though, meaning you’ll end up paying more money over time on your mortgage. 

Your mortgage balance will also stay the same until you begin paying again. This means your monthly payments will increase to make up for the shortfall once your mortgage holiday is over. 

You can apply for a Santander mortgage holiday either online or over the phone. Note that taking a mortgage holiday shouldn’t affect your credit history. 

Santander mortgage overpayments

Whether you’ve had an unexpected windfall or you’ve changed how you budget, you might have some extra money that you’d like to use to pay off your mortgage quicker. 

This is called making an overpayment. With Santander mortgages, you’ll be able to make unlimited overpayments unless you have a fixed-rate mortgage. Then, you’ll only be able to make overpayments of up to 10% of your total mortgage value per year. 

Regardless of your mortgage rate, the minimum overpayment you can make with Santander is £500.

Getting a Santander mortgage online

If you’ve compared mortgages and Santander has come out on top, you can apply online, over the phone or in-person at your local branch. Applying online is one of the simplest options. To do this, you’ll need the following documentation:

  • An agreement in principle (see below)

  • Proof of income, including 3 months of payslips (or 4 weeks if you’re paid weekly)

  • If you’re self-employed, an accountant’s certificate or your most recent tax year overview

  • Evidence of any other income, whether that’s a bonus, a private pension, or child benefit payments

  • Bank statements to support your income and expenses

  • Information on any existing loans, credit cards or insurance policies

  • Proof of address for the past 3 years and proof of identity  

Agreements in principle

Before you apply for a mortgage, most lenders will need to see an agreement in principle. Also called a mortgage in principle (MIP), this is essentially a certificate that gives an indication of what you could afford to borrow. 

You can apply for a MIP through Santander, through another lender, or through a broker. Applying for a MIP through Santander won’t affect your credit score, plus it’ll be valid for 60 days. 

Santander mortgage timetable

Once you’ve secured your MIP and provided all the documentation for your mortgage application, you can expect to hear back within two weeks. This timeframe can be impacted by whether you’ve submitted all the relevant documents or how busy the housing market is.

Before you receive your mortgage offer, Santander will arrange to have your property valued to make sure what you’ve asked for matches up. You’ll typically have between 3 to 6 months to accept your offer. 

If you’re remortgaging or applying for a new mortgage deal as an existing Santander customer, it’s 14 days. Santander then releases the funds for your property on the day of completion. 

Santander mortgage reviews

In Which? guide’s 2020 survey of the best UK mortgage providers, Santander came joint-9th out of 23 lenders. Customers particularly liked their application process and online management capabilities. What’s more, they have a good offering for first-time buyers. 

Compare Santander mortgages

There are over 40 different Santander mortgages to choose from. Why not compare mortgages from Santander and various other providers to find the best one to suit your needs? You’ll also discover more details about the mortgage process on our mortgages guide page.