Santander UK will lower the rate on its recently launched My First Mortgage to 4.99% from Wednesday 4 March, taking the 98% loan-to-value product below 5% less than a month after its debut.

The deal, which was introduced on 3 February, is available to first-time buyers purchasing an existing house, with a minimum £10,000 deposit and borrowing of up to £500,000.

It carries no fee and offers £250 cashback, and is available exclusively via a broker or through a Santander adviser.

The lender said the 0.20% reduction is intended to support borrowers seeking high LTV lending, with the sub-5% threshold seen as significant for first-time buyers weighing up affordability.

Alongside the change to My First Mortgage, Santander is cutting rates across all 85% and above LTV first-time buyer products by up to 0.38%. This includes a return to sub-4% pricing at 90% LTV, with a two-year fixed rate at 3.99%.

Further reductions of up to 0.33% apply to selected higher LTV home mover and new build products.

WIDER CUTS ACROSS THE RANGE

From 4 March, all 85%, 90% and 95% LTV two-year fixed rates for first-time buyers will reduce by up to 0.23%, while equivalent three-year fixed rates will fall by up to 0.38%. Five-year fixed rates across 85%, 90%, 95% and 98% LTV will reduce by up to 0.20%.

For home movers, two-year fixed rates at 85%, 90% and 95% LTV will fall by up to 0.18%, with three-year fixed rates at those tiers reducing by up to 0.33%.

Remortgage products will also see selected reductions. Two-year fixed rates at 85% and 90% LTV will reduce by up to 0.11%, while three-year fixed rates at 60% and 75% LTV will fall by up to 0.08%. Five-year fixed rates at 85% and 90% LTV will be cut by up to 0.05%.

Last week, Santander confirmed the first offer under My First Mortgage had been issued via John Cozzolino, mortgage and protection specialist at My Mortgage Maker Ltd, trading as Windsor Hill Mortgages in Bath.

His clients applied for £475,000 with a £10,000 deposit. The offer represented 97.94% of the £485,000 purchase price of a property in Somerset.

David Morris, director of homes at Santander UK, said: “We launched My First Mortgage with the aim of helping more first-time buyers take their initial step onto the property ladder.

“I’m proud to say that in the weeks since we’ve launched, we have done just that with many first-time buyers receiving offers of lending under My First Mortgage.

“It’s fantastic to be able to go one step further and reduce the interest rate so soon after launch to that crucial sub-5% mark, that we know so many buyers are seeking when looking at higher LTV borrowing.

“Our latest cuts show that we’re also still here to support a range of buyer types, with reductions across our new build, home mover and remortgage products helping customers further manage the costs of owning their dream home.”

The latest move adds to intensifying competition in the higher LTV segment, as lenders seek to balance affordability pressures with risk management in a market where first-time buyer demand remains a key driver of activity.