Santander slashes Help to Buy Isa rate for new customers

Santander bank front

Santander has slashed the rate on its Help to Buy Isa, meaning new customers will be paid just 2% interest, or 2.5% if they hold a 123 Current Account.

The interest rate on the account was increased to 4% in March, to match the rate offered by Halifax. But Halifax cut its Help to Buy Isa rate for new customers to 2.5% earlier this month, and it did not take Santander long to follow.

Santander will at least honour its old rates for anyone who signed up for its Help to Buy Isa before 23 May, who will keep earning 4%.

This latest cut means only a handful of aspirational homeowners can now access the top Help to Buy Isa rates. The only deposit takers to pay 4% are Cumberland Building Society and Penrith Building Society - which is the UK's smallest building society - but these accounts are only open to local customers in parts of the north west of England and southern Scotland.

For everyone else, the best Help to Buy Isa rate is now 3% from Virgin Money. See our guide on Which Help to Buy Isa should I get?

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