All new A&L mortgage products will now revert after their initial rate to a Bank of England base rate tracker at +3.74%, currently 4.24%.
The move follows court approval for the legal transfer of Alliance & Leicester to Santander UK on 28 May.
All product codes on its current range excluding Lifetime Tracker products will change from close of business Monday 31 May 2010 and will be replaced.
A spokesman for Alliance & Leicester Mortgages, says: “With immediate effect we have decided to revert all new A&L mortgage contracts to Bank of England base rate plus 3.74%, which is equivalent to the current Santander SVR.
“There are no changes to the SVR for any current Alliance & Leicester mortgage customers, nor are we changing the Santander SVR for new or existing customers.”
Yesterday Lloyds Banking Group introduced a new Homeowner Variable Rate of 3.99% for new Lloyds TSB and Cheltenham & Gloucester customers.