Barclays slashes mortgage rates in ‘bold move’ | Personal Finance | Finance
Barclays is set to reduce some mortgage rates from Wednesday, bucking the trend of lenders who have been increasing rates lately. The banking giant revealed it will slash up to 0.20 percentage points off certain products in its residential purchase and remortgage range.
Explaining the decision, which comes after a “volatile” period for swap markets that inform mortgage pricing, Mark Arnold, Barclays’ head of mortgage and savings, said: “I’m delighted we’re able to decrease core mortgage rates again, after what has been a very volatile period in the swap markets. As we have done during the course of this year, when we see an opportunity in the swap markets we will act swiftly to pass on the benefit to our mortgage customers.”
A highlight of the rate cuts is a remortgage offer set at 4.3% down from 4.5%, geared towards borrowers with a 25% equity stake, alongside a £999 fee. The recent pattern among major lenders was a spike in various mortgage rates, linking them to the swap rate climate.
Amidst these market conditions, the Bank of England dropped the base interest rate to 4.75%, representing the second time this year that interest rates have been cut. Nevertheless, financial pundits foresee a more gradual reduction in rates in response to the ongoing economic circumstances.
Barclays is leading the charge, as noted by Nicholas Mendes, mortgage technical manager at John Charcol: “Barclays has made a bold move as the first high street lender to cut mortgage rates in response to recent market changes. With swap rates easing over the past couple of days, it’s great to see a lender acting quickly to reflect the slightly improving conditions. Some standout reductions include the two-year fixed at 90% loan-to-value (LTV) with no product fee, dropping from 5.49% to 5.39%.”
He went on to say: “While these reductions won’t change the world, they do offer a bit of breathing room for borrowers, especially after the recent trend of rising rates among high street lenders. This could also signal the potential for more repricing across the market if conditions remain stable. It’s a small but positive step in the mortgage landscape, bringing a glimmer of hope to those navigating the current borrowing climate.”
Moneyfacts echoes this sentiment, noting that the average two-year fixed mortgage rate was 5.53% on Tuesday, inching down from 5.54% on Monday, while the five-year fixed rate stands steady at 5.28%, unchanged from Monday.
