Santander launches Help to Buy mortgages

Santander is the latest lender to launch a Help to Buy mortgage range.

Santander has confirmed details of its Help to Buy mortgage range.

The mortgages will be available from Thursday 9th January and are part of the mortgage guarantee section of the Help to Buy scheme. They are available to borrowers with deposits of 5%-10% ad come with no upfront fees. They also include a free valuation and £250 cashback on completion.

Santander has launched three different Help to Buy mortgages. There’s a two-year fixed rate at 4.99%, a five-year fixed rate at 5.49% and a two-year tracker rate at 4.99% (Base Rate plus 4.49%). They all offer a free valuation and £250 cashback on completion.

Santander is the second lender to unveil Help to Buy mortgage deals this month, following Lloyds last week. Read Lloyds Bank unveils Help to Buy mortgage range for more on what it had to offer. The Post Office has also confirmed that it will joining the scheme too.

What is Help to Buy?

Help to Buy is the Government’s latest brainwave on how to make housing ownership accessible to more people. It actually consists of two different schemes: an equity loan scheme and a mortgage guarantee scheme.

The mortgage guarantee scheme has the Government essentially acting as a guarantor on mortgages, agreeing to compensate the lender should the borrower end up being repossessed.

For a full breakdown of how both parts of the Help to Buy scheme work, read Help to Buy mortgages explained.

Are the mortgages any good?

The Santander deals are certainly better than those launched by Lloyds. But they can be beaten if you only have a 5% deposit, even by mortgages that aren’t offered as part of the Help to Buy scheme.

For example, in the two-year fixed rate market you can get a lower rate of 4.69% from Accord Mortgages, albeit with a £975 fee. If you can’t afford a fee, there is a fee-free deal from Norwich & Peterborough Building Society at 4.89%.

With the five-year fixed rate, you can get a rate as low as 4.99% from HSBC, with a fee of £99. If you don’t want to pay a fee there’s a mortgage at 5.29% from Norwich & Peterborough Building Society.

However, the tracker mortgage is certainly the best option at 95% in my view. There is a lower rate available from Melton Mowbray, which is currently charging 4.79% with a £798 fee. However this variable mortgage tracks at a 0.2% discount from the lender’s Standard Variable Rate, which can be changed at any time, irrespective of what happens with the Bank of England Base Rate. This added uncertainty is why I’m not a huge fan of discount mortgages personally.

Help to Buy so far

So far nearly 750 homes have been purchases thanks to the Help to Buy mortgage guarantee scheme, while 6,000 people have put offers in on properties thanks to the mortgages.

The Help to Buy equity loan scheme has so far helped 20,000 households, according to Government figures.

See how much a mortgage could cost you and get help from an expert mortgage adviser

This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker, before acting on anything contained in this article.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

More on mortgages:

Help to Buy mortgages explained

The best Help to Buy mortgages

Seven reasons mortgage lenders turn you down

Overpay your mortgage and save thousands