- Barclays is cutting mortgage rates by up to 0.33 percentage points tomorrow
- Lender will offer some of the lowest two-year and five year fixes on the market
- Halifax is also cutting rates by up to 0.13 percentage points
Barclays has upped the ante in the mortgage price war that is currently playing out between banks and building societies.
Tomorrow, the mortgage lender is cutting rates by up to 0.33 percentage points across a wide range of deals for both homebuyers and those remortgaging.
This will result in several new best-buys.
The announcement by Barclays follows a flurry of interest rate cuts over the past couple of weeks.
Halifax has also announced it is cutting mortgage rates by up to 0.13 percentage points on selected deals.
Yesterday, First Direct cut some of its home loan costs. On Tuesday, Nationwide and Virgin Money reduced rates on selected deals.
And last week, HSBC, Barclays, Yorkshire Building Society, Halifax and Santander also lowered their mortgage rates.
Related Articles
HOW THIS IS MONEY CAN HELP
Stephen Perkins, managing director at broker Yellow Brick Mortgages told the news agency, Newspage: ‘The Ferris wheel of rate reductions has returned to the top for another go around, with Barclays announcing fresh rate reductions hot on the back of their previous rate drops.
‘This cycle is gaining momentum ahead of an expected Bank of England base rate cut in the short term. All borrowers will be enjoying the ride.’
Craig Fish, director of Lodestone Mortgages and Protection added: ‘All lenders continue to make significant rate reductions not only to gain a share of the increased business that is going around but to reduce borrowing costs for mortgage holders.
‘This is superb news and it really does look like a new rate war has started.’
What are the cheapest mortgage rates?
Although these rates still will seem high to many people buying or remortgaging at the moment, the latest move by Barclays sees the lowest rates head back closer to where they were at the start of the year.
Those buying with deposits of 40 per cent or more will now be able to secure a five-year fix at 4.09 per cent with Barclays. The deal comes with a £899 fee.
The next best five-year fix on the market is 4.2 per cent, while the average five-year fix is 5.51 per cent, according to Moneyfacts.
This means someone buying with a £200,000 mortgage being repaid over 25 years would expect to pay £1,066 a month with this Barclays deal.
The same person on the market average rate would end up paying £1,229 a month. That equates to £163 more each month, or £1,956 over the course of a year.
Someone buying with a 25 per cent deposit will also be able to secure a market leading five-year fix of 4.24 per cent with Barclays, from tomorrow. This deal comes with no fee attached.
The next best 75 per cent loan-to-value mortgage product on the market is offered by HSBC at 4.37 per cent.
Barclays will also offer the lowest two-year fixed rate mortgage. Someone buying with a 40 per cent deposit or more will be able to secure a 4.52 per cent rate with Barclays. This comes with a £899 fee.
The next lowest two-year fixed mortgage rate is Halifax’s 4.63 per cent deal with a £1,099 fee.
Homeowners coming up to a remortgage also stand to benefit from Barclays’ latest changes.
Its lowest five-year fix aimed at those remortgaging with at least 40 per cent equity in their home will be 4.36 per cent from tomorrow, with a £999 fee.
That matches NatWest as the lowest rate on the market. However, NatWest’s deal comes with a heftier £1,544 fee.
Barclays’ premier banking customers can do even better. The lowest rate open to them from tomorrow is 4.31 per cent, with a £999 fee.
Anyone remortgaging who wants to fix for two years will be able to secure a new best buy with Barclays tomorrow, if they have at least 40 per cent equity in their home.
Its lowest two-year fix aimed at remortgagers is falling from 5.01 per cent to 4.7 per cent. Premier banking customers can do even better and pick up a rate of 4.67 per cent.
Randall Mitchell, director at broker Charwin Mortgages told Newspage: ‘Barclays’ rate cuts are fantastic news and a continuation of the fight for top spot. With new two and five year fixed rates, mortgages are becoming more affordable for everyone.
‘These changes are a huge win for homebuyers and those looking to remortgage.’
Justin Moy, managing director at EHF Mortgages added: ‘Some seismic rate cuts from Barclays, who have certainly put the cat among the pigeons within the High Street lenders. The long-term deals in particular look more attractive.’
Some brokers feel that rates are likely to fall further over the coming weeks and lenders compete for business.
Ben Tadd, director at Lucra Mortgages said: ‘Barclays are adding further fuel to the fire by slashing their rates in quick succession.
‘The other big six lenders are now likely to follow suit to stay in touch at the top of the rate tables, which will lead to a domino effect in the market with other smaller lenders forced into action, too.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
