Borrowers need a 40% deposit though, and will have to stump up a significant mortgage fee of £1,499.

HSBC offered the same rate at the end of last year, before pulling it as swap rates started to increase. However, Santander has been the first lender to launch a sub-1% deal this year, the lowest fixed rate currently available.

Miguel Sard, managing director of mortgages at Santander, said that in today’s interest rate environment, many borrowers appreciated the certainty of locking into a rate.

David Hollingworth, associate director at L&C, said that while it was unlikely there would be lots of borrowers chasing such a short fixed rate, the launch was more a sign of Santander’s desire to grab the attention.

He continued: “This shows the level of competition that the market has, with lenders looking at ways to differentiate themselves. We have seen other lenders looking to use incentives, like cashback, too. Lenders know that it’s a crowded and competitive market and so need to add features and benefits to deals.”

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Alongside the 18-month fixed rate deal, Santander made a number of other changes to its fixed rate proposition, including adding £250 cashback to its five-year fix at 1.89%, which comes with a £999 fee.

It also unveiled new rates across its range of Help to Buy: equity loan deals, ranging from 1.54% for a two-year fix with a £999 fee, to 2.04% for a fee-free fixed rate lasting two and a half years.