What Santander has changed from 22 May 2026
Santander has made cuts across its higher LTV fixed-rate range, effective 22 May 2026. Two-year fixed rates at 85–95% LTV have been reduced by up to 0.15%, starting from 4.81% with a £999 arrangement fee and £250 cashback. All three-year fixes in the 85–95% LTV band have been cut by up to 0.23%, starting from 4.90%. Five-year fixes at 90–95% LTV have been reduced by up to 0.14%, starting from 4.89%.
For home movers, the cuts go further: 85–95% LTV two-year fixes have been reduced by up to 0.24% from 4.84%. On the remortgage side, the 90% LTV two-year fix now sits at 5.15% with a £999 fee.
Why these cuts are significant in context
The wider mortgage market has moved sharply in the opposite direction. The UK average two-year fixed rate rose from 4.83% at the start of March 2026 to 5.75% on 18 May — an increase of 0.92pp in under three months. Against that backdrop, Santander's decision to cut at the higher LTV end is notable. It suggests the lender is actively competing for first-time buyers and lower-deposit borrowers even as swap rates and gilt yields put upward pressure on headline rates across the market.
For contractors with deposits of 5–15% — a common position for those who have been contracting for several years and are accumulating savings rather than drawing PAYE-style income consistently — these products are directly relevant.
How Santander assesses contractor income
Contractor income is typically assessed on annualised day rate at Santander. The daily rate is multiplied by five working days and then by 46 weeks to arrive at a gross annual income figure. This is a more accurate representation of a contractor's earning capacity than using payslips or bank statements, and it typically produces a higher income figure than PAYE would for equivalent billing.
However, Santander processes contractor applications through its specialist lending team — and that team is only accessible via an approved broker. Submitting directly as a contractor, or through a broker who routes the case through Santander's standard employed income pathway, risks the application being assessed incorrectly and either declined or offered at a lower loan amount.
Santander also operates a no-dual-pricing policy: broker and direct customers receive identical rates. This means there is no penalty for using a broker — and significant benefit in terms of routing the application correctly.
Who these cuts are most relevant for
Contractors with 5–15% deposits who are purchasing or remortgaging, and whose annualised day rate supports the loan size they need. The 85% LTV tier is particularly useful for contractors who have a smaller deposit but strong income — day rate assessment often unlocks substantially more borrowing capacity than the lender's headline rate suggests, and that headroom is more valuable when the deposit is constrained.
Day Rate Finance can check whether these Santander rates suit your contractor situation — get a free assessment today.
Related reading
How lenders assess contractor income and what documentation you'll need to provide.
Why UK borrowers are more exposed to rate rises than any other major European market.
CPI fell to 2.8% but the Bank of England held rates. What it means for contractors on expiring fixes.
Category: Lender Rate Cuts & Product Updates