Barclays brings ‘good news’ update for borrowers | Personal Finance | Finance
Barclays is updating its interest rates across its new residential, remortgage and reward home loans, with some deals falling by as much as 0.66 percentage points.
It follows a similar move by Nationwide earlier this week, as lenders scramble to offer savers the sharpest deals on the high street. The standout cut is on Barclays‘ two-year fixed rate at 90% loan-to-value, which tumbles from 5.45% to 4.79% for new home loans. The monthly repayments on a new £200,000 two year fix would come in at £1,182, which works out at a saving of £46 a month or £1,100 over two years compared to the previous deal.
First-time buyers borrowing at 95% LTV will see their two-year fix fall from 5.50%to 5.11%. And its Green Home two-year fix at 90% LTV drops from 5.35% to 4.69%.
Nationwide, meanwhile, cut rates by up to 0.19 percentage points yesterday across its two, three, five and ten-year fixed deals, with tracker rates down by up to 0.12 points.
A ceasefire on a knife-edge
Despite the positive news, brokers are warning borrowers not to get too comfortable. The cuts come just as tensions flare again in the Middle East, with fears that a fragile ceasefire could unravel and send oil prices – and mortgage rates – climbing once more.
Justin Moy, of EHF Mortgages in Chelmsford, said the trouble brewing overseas “will inevitably push mortgage rates up yet again, along with other costs such as fuel”.
His message to borrowers: get in now. “Sharpen your pencil now and jump on,” he said, warning that rates “can be here today and gone tomorrow.”
Emma Jones, of Whenthebanksaysno.co.uk in Runcorn, told Newspage the good news may not last. She said rising oil prices could force lenders to “pause for thought.”
“A dangerous game of chicken”
The warnings grew starker as the day went on. Rohit Kohli, of The Mortgage Stop in Romsey, said the Barclays cuts had been locked in before the latest upheaval – pointing out that Donald Trump had declared the Iran ceasefire over on the very morning the rates dropped.
He urged borrowers not to bank on further reductions. “This may well be one of the last cuts we see for a while,” he said, adding that anyone waiting for a better deal is “taking a gamble.”
Darryl Dhoffer, of The Mortgage Geezer in Bedford, was blunter still. Borrowers holding out for rock-bottom rates, he said, are “playing a very dangerous game of chicken with global politics.”
He described the current run of sub-4.5 per cent deals as more of a “tactical clearance sale” than any lasting shift in the market.
Lock it in, brokers urge
Not every broker was quite so gloomy, but the advice was largely the same: don’t wait. David Stirling, of Mint Wealth in Belfast, said swap rates had fallen and lenders were “moving fast,” pointing to further cuts from Leeds Building Society due tomorrow across residential, buy-to-let and shared ownership products.
But he cautioned that the calm “is potentially borrowed” – and could evaporate fast if the ceasefire collapses and inflation climbs again.
Tracey Dixon, of Pure Mortgage and Protection in Cardiff, said the cuts were welcome but were “not a signal to sit back and wait.”
She pointed out that many lenders allow borrowers to secure a rate months in advance, with the option to switch to something cheaper if prices fall further before completion – giving buyers certainty without the risk of missing out.
Her advice to anyone with a deal ending in the next six months: don’t gamble on the market turning in your favour. Lock something in – and review it later if rates do fall further.
