Santander is set to change the interest rate on one of its popular bank accounts in a matter of days. The major high street bank is cutting the interest rate for current account holders from April 28.

Customers who have the Santander Edge Up package bank account, which carries a monthly fee of £5, have been have enjoyed a 3% interest rate. But the interest on offer for this account is set to drop from 3% to 2.5% for in-credit balances under £25,000.

This means, if you consistently have a balance of £1,000, your yearly interest earnings are set to dip by £5, reducing from £30 down to £25.

Speaking to The Sun, a spokesperson for Santander said: "We regularly review rates in light of changing market conditions and offer a range of competitive current and savings accounts.

"As such from April 28, 2025 we will be reducing the in-credit interest on the Santander Edge Up to 2.5% AER (variable) on balances up to £25,000."

This announcement comes shortly after the news that those in the market to buy or remortgage their homes could now secure larger loans from Santander UK. The bank has become one of the first major lenders to slash residential affordability rates following the FCA's appeal earlier this month for fiscal institutions to tailor affordability calculations, as interest rates fall.

Santander has made a point of decreasing all residential affordability thresholds by as much as 0.75%, marking the most favourable adjustments since 2022.

In practical terms, this means that many customers applying for a residential from Santander UK can now borrow between £10,000-£35,000 more than before the change, depending on their individual circumstances and subject to affordability checks and loan to income limits.

Last month, Santander UK announced a new range of products with rate reductions of up to 0.15% for home movers and up to 0.08% for first-time buyers.