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Current account holders can get £130 when switching to Santander
Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 15/09/2021

Santander has announced it intends to offer £130 to customer switching their bank accounts – making this the largest cash incentive to switch in the market right now. This comes hot on the heels of Lloyds Bank that launched their £100 current account switching offer last week.


Both new and existing customers of Santander are eligible for the cash pay out when opening a Santander 1|2|3, 1|2|3 Lite, Everyday, Select or Private Current Account using the Current Account Switching Service (CASS).


Customers need to complete their switch within 60 days of starting the process, set up two active direct debits, deposit £1,000 minimum in the first sixty days from opening and log into their online or mobile banking app. Santander will also apply additional eligibility checks.


In good news for those customers that actively switch their current accounts, Santander has made this £130 cashback offer available to those that have held a Santander current account previously – if they switch from a competitors current account.

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Savings rate rises continue to lag behind inflation

Savings rates continue to improve, however, due to a dramatic rise to inflation, not one standard savings account can beat its eroding power. 

The Consumer Price Index (CPI) rose to 3.2% during August 2021 up from 2.0% in July 2021. This is the highest level seen since records started in 1997. There remains no single savings account that can outpace inflation. The highest cash savings rate available right now is from Atom Bank at 1.86% for a five year fixed rate bond. This is an improvement compared to 18 August 2021 when the top rate was 1.72% for a five year fixed deal. But, while rates are increasing they are lagging far behind the pace of inflation and even the best rates just prior to the start of the pandemic would not have kept pace. On 18 September 2019 the top return in the market over five-years was 2.45%. 

Those needing to save into a cash ISA face even worse news with rates here only reaching 1.50% for a five year fixed rate cash ISA. This means that savers should only use cash ISAs if they are likely to exceed their personal savings allowance and as a result could face paying tax on their interest income.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:
“Savings rates have improved vastly since last month which will be great news for consumers looking for a competitive return on their cash. However, inflation overshadows the positive shift, as the latest figure of 3.2% is the largest rise month-on-month since records began and not one standard savings account can beat its eroding power. There is an expectation for inflation to stay above the Bank of England target of 2% for some time yet, but it is vital savers do not become apathetic as they could miss out on some of the best rates we have seen all year.
“Locking cash away for longer may not be feasible for some, indeed consumers may be reluctant to invest longer than a year at most due to the impact of the Coronavirus pandemic on their financial health. However, savings providers are keen to draw in business and fixed rates have been rising substantially in recent months. Savers can now get a one-year bond paying 1.50% (Atom Bank) but a year ago savers would have had to tie their money up for five years for a rate nearest to this return. Those who are averse to a fixed account will find easy access rates have improved since last month, but there is much more room for improvement as a year ago, savers could get a rate of 1.20% (Skipton Building Society).
“ISA’s are still worth considering for any saver yet to use their tax-free allowance, due to their longer-term advantages, and rates are thankfully rising in this arena. However, there remains a notable gap between fixed-rate ISAs and fixed-rate bonds. It would therefore be sensible for savers to compare the rates carefully and consider their Personal Savings Allowance. One of the savings providers to cause a stir in the fixed ISA market recently was Secure Trust Bank, it now leads both the two- and three-year fixed ISA sector with rates at 1.15% and 1.25% respectively.
“Keeping abreast of the changing savings market is vital, as savers could stand to miss out if a deal has a short shelf life or becomes oversubscribed quickly, so signing up to rate alerts and newsletters is wise. Due to the refreshing change to the market, it would not be too surprising if some savers decide to wait a little longer in the weeks ahead expecting more improvements to surface.”
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Remortgage from a big lender and save £3,500 on average each year

Homeowners whose mortgage deal has come to an end and are now on one of the six big lenders’ revert or standard variable rates (SVR) could save £3,528 on average each year. Research conducted by Habito found that just under half of the borrowers they spoke to were either paying their lender’s highest mortgage rate or were uncertain of the rate being paid.

Borrowers are being urged to switch their mortgage and take advantage of the lowest rates ever seen. A mortgage broker can help to find borrowers the best mortgage rates for their circumstances.


Oliver Dack, a mortgage adviser at Mortgage Advice Bureau said: “Rising inflation has seen the cost of living increase for all of us and with further tax increases on the way many consumers will be looking to reduce their monthly outgoings. A mortgage is often the greatest monthly cost for most homeowners. There are huge savings to be had for the majority of those with a mortgage. Homeowners on their lender’s reversion rate can easily save significant sums when switching to a lower rate. And those on a current fixed deal may find that, even after paying an early penalty charge, there are still savings to be made. A mortgage broker can help to calculate these potential savings and identify those lenders most likely to accept a borrower.”

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Landlords benefit from reducing buy-to-let rates
Molo Finance has reduced its buy-to-let mortgage rates across selected products. This includes the following reductions on its rates for landlords with a limited company or special purpose vehicle (SPV).
These deals are available for remortgages and to purchase a new buy-to-let property. They all revert to a rate of 4.41% at the end of the initial term. 
Landlords must be no older than 85 at the end of the mortgage term and earn at least £20,000 to qualify for these mortgages. The minimum loan value is £25,001 with a maximum loan of £450,000. Each product also has the option to choose a percentage fee of 1% of the mortgage advance instead of the flat fee.  The maximum loan on these options is £1.5 million at 65% LTV and £1 million at 75% LTV. The rental income will need to be at least 125% of mortgage interest calculated at a rate of 5.50%.
Francesca Carlesi, chief executive of Molo, said: “The mortgage market has never been so competitive.
“Lowering our prices gives landlords excellent options, whether they’re purchasing a property as an individual or a limited company.
“Our new rates, combined with an entirely digital approach for getting a mortgage, give investors more flexibility and allow them to go through the borrowing process at speed while saving money with Molo.”

 

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Mortgages rates see biggest cuts in 16 months

Average mortgage rates for two- and five-year fixed deals have seen the greatest decline in a single month since May 2020. Data from Moneyfacts UK Mortgage Trends Treasury Report shows that for these average rates have now fallen for the third month in a row. The latest average rate for a two year fixed mortgage is 2.38%, a reduction of 0.14%, with a five year deal average of 2.63%, a 0.12% fall.

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Recent News

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The best savings rates this week 10.09.21

10th September 2021

At the beginning of this week Al Rayan Bank increased its fixed bond rates, resulting in it now topping both the three and two year fixed rate bond charts

At the beginning of this week Al Rayan Bank increased its fixed bond rates, resulting in it now topping both the three and two year fixed rate bond charts

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The best residential mortgage rates 10.09.21

10th September 2021

Mortgage rates have remained highly competitive this week with lenders continuing to reduce rates across their mortgage deals

Mortgage rates have remained highly competitive this week with lenders continuing to reduce rates across their mortgage deals

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Should you take equity release to pay off your children’s mortgage?

10th September 2021

Rising house prices has resulted in some older homeowners unlocking the equity they have built up within their own property to gift house deposits to their children via equity release

Rising house prices has resulted in some older homeowners unlocking the equity they have built up within their own property to gift house deposits to their children via equity release

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New Lloyds Bank £100 switching offer

9th September 2021

Lloyds Bank has launched a switching offer that will see new customers earn £100 in cashback when they switch to a Club Lloyds or Club Lloyds Platinum account

Lloyds Bank has launched a switching offer that will see new customers earn £100 in cashback when they switch to a Club Lloyds or Club Lloyds Platinum account

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Two and five year mortgage rates hit historic lows

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Although the number of mortgage deals have almost halved since March, the average mortgage rates on two and five-year fixed deals have hit historic lows

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What are the best ISA investment funds in August 2021?

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Find out which investment ISAs have performed the best in August 2021.

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Mortgages rates see biggest cuts in 16 months

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Average mortgage rates for two- and five-year fixed deals have seen the greatest decline in a single month since May 2020.

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The best savings rates this week 10.09.21

10th September 2021

At the beginning of this week Al Rayan Bank increased its fixed bond rates, resulting in it now topping both the three and two year fixed rate bond charts

At the beginning of this week Al Rayan Bank increased its fixed bond rates, resulting in it now topping both the three and two year fixed rate bond charts

Read More

Our Team of Specialists

Michelle Monck
Consumer Finance Expert
Derin Clark
Online Reporter
Rachel Thrussell
Savings Analytics Manager
Darren Cook
Mortgage Analytics Manager
Rachel Springall
Finance Expert & Press Officer
Finance Expert & Press Officer

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