Money Insider: Santander zeroes in on market share

Despite the Supreme Court's ruling on bank charges this week that dashed the refund hopes for millions, there has been more positive news on current account charges. Santander has announced it will launch a current account without any charges available to its mortgage customers from January 2010.

The Zero current account has no charges for unauthorised borrowing or unpaid items, has no overseas charges for debit card transactions, and offers six per cent credit interest on balances up to £2,500 for the first 12 months. This is an innovative move from Santander and as long as their mortgage pricing remains competitive, it is likely to boost its current account market share.

A couple of the smaller building societies also launched products this week that proved it's worth checking out the whole market before signing on the dotted line for your home loan.

Saffron Building Society now offers a three-year fixed rate mortgage up to 90 per cent loan to value priced at 5.89 per cent with a £995 fee. The deal is available for home movers only, but is likely to prove popular.

Chorley & District Building Society is also targeting those with a smaller deposit with a very keenly-priced interest rate of 4.99 per cent fixed for two years. The fee of 0.75 per cent may prove less attractive for those seeking a larger loan, but a loan of £130,000 or less will result in a fee under the £1,000 mark.

For those still to decide on a home for their tax free savings for this tax year, Northern Rock is offering some new stepped fixed rate ISAs for both a three- and five-year term. Although the five-year bond may be too long to commit to in the current low interest rate environment, the pricing structure of the three-year option is worth serious consideration. In year one the rate is fixed at 3.75 per cent, rising to 4 per cent for year two and peaking at 4.5 per cent for the final year. When you compare these numbers with the standalone ISA fixed rates of 3.33 per cent for 1 year, 3.59 per cent for two years and 4.2 per cent for three years, there will undoubtedly be considerable interest in this escalator style product.

Andrew Hagger is a money analyst at Moneynet.co.uk.

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