Mortgage wars! How to switch and save thousands

Santander has cut the rate on its two-year mortgage range just days after Yorkshire Building Society launched the lowest-ever mortgage rate. Here's how to take advantage of the mortgage price war.

Santander - bank card close up

Santander has slashed the rates on its two-year mortgage deals, which is expected to spark a mortgage war in the coming months.

The UK's third-largest lender is offering up two-year mortgages for as little as 1.14%. It has also cut the rates on its existing mortgages by 0.3% and added additional mortgages to its range.

This follows the launch of the lowest ever two-year mortgage of 0.89% from Yorkshire Building Society on 21 April. The deal is available on loans up to a maximum of 60% Loan to Value (LTV) with a product fee of £1,495.

As the housing market slows down, providers are keen to compete for the best offers. Those who are on their lender's standard variable rate are being urged to take up these cracking mortgages.

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Why go for a two-year deal?

Two-year fixed rate mortgages are a good bet if you're looking for manageable monthly repayments that are guaranteed for a short period.

They also tend to offer the most competitive rates compared to longer lasting five- and 10-year options and give you flexibility so you aren't tied down in the future when your plans might take an unexpected turn.

If you're interested in a two-year fixed rate mortgage we've rounded up the best rates to go for right now.

The best two-year fixed rate deals

Here are the best rates on two-year fixed rate mortgages from 60%-95% Loan to Value (LTV).

LenderLTVRateFeeERCs
Yorkshire Building Society60%0.99%£1,4952% in first year, then 1% until the end of fixed period.
Chelsea Building Society65%1.17%£1,6952% in first year, then 1% until the end of fixed period.
HSBC70%1.19%£9992% in first year, then 1% until the end of fixed period.
HSBC75%1.19%£7492% in first year, then 1% until the end of fixed period.
HSBC80%1.29%£9992% in first year, then 1% until the end of fixed period.
First Direct85%1.44%£1,4503% in first year, then 2% until the end of fixed period.
Monmouthshire Building Society90%1.65%£9953% until the end of fixed period.
The Nottingham Building Society95%2.99%£9992% in first year, then 1% until the end of fixed period

As you can see the rates on the top deals tend to command a hefty fee. So we've also picked out the best rates on two-years deals with a fee of under £500.

LenderLTVRateFeeERCs
Post Office Money60%1.38%£4953% in first year, then 2% until the end of fixed period.
Norwich & Peterborough Building Society65%1.44%£1952% in first year, then 1% until the end of fixed period.
Accord Mortgages70%1.47%£4952% in first year, then 1% until the end of fixed period.
Accord Mortgages75%1.47%£4952% in first year, then 1% until the end of fixed period.
Accord Mortgages80%1.56%£4952% in first year, then 1% until the end of fixed period.
Post Office Money85%1.77%£4953% in first year, then 2% until the end of fixed period.
Loughborough Building Society90%2.19%£02% until the end of fixed period.
Monmouthshire Building Society95%3.25%£03% until the end of fixed period.

Other options

A shorter fix will give you some peace of mind and a competitive rate.

However, the downside is that you will need to remortgage more often than with longer lasting deals, which means paying the associated costs and doing the paperwork again.

Compare the best mortgage deals here