Homeowners are set to save hundreds of pounds after Barclays cut its two-year fixed mortgage rate, in what experts are calling a sign that the “market is in full price war mode.” The High Street lender will offer better deals for buyers with larger deposits, at least 25%, including reducing one rate from 4.01% to 3.79%.
For someone with a £200,000 repayment mortgage over 25 years, that means monthly payments fall from £1,056 to £1,029 – a saving of £27 a month or £648 over the two-year fix. Barclays is also offering a 3.75% deal for those with a 40% deposit, though both products carry an £899 fee. Mortgage experts welcomed the move. Justin Moy, Managing Director at EHF Mortgages, said: “Good news again for borrowers as Barclays re-prices more of their products, this time helping those with larger deposits or equity, whether buying or refinancing their homes.
“This could well be the start of a mini-price war.” Ranald Mitchell, Director at Charwin Mortgages, told Newspage: “Barclays cutting rates again shows the mortgage market is in full price war mode.
“Competition is heating up fast, and that’s great news for buyers and those looking to remortgage. With the FCA relaxing affordability rules, more borrowers can actually take advantage of these lower rates, giving households some much-needed breathing space, and helping many finally get on the property ladder.”
Other brokers said Barclays’ move is likely to prompt similar cuts from rival lenders. Stephen Perkins, Managing Director at Yellow Brick Mortgages, said: “Rate cuts from one of the top six lenders is always a welcome way to start a week. It is expected that other lenders should follow suit to fight for market share, which will be positive news for borrowers.”
Pete Mugleston, Mortgage Advisor at onlinemortgageadvisor.co.uk, said: “Borrowers who held out to see if the Bank of England would cut rates have been rewarded. Barclays has moved quickly with lower rates, and when a big lender makes changes like this it often sets the tone for the rest of the market.
“In such a competitive environment, it’s likely we’ll see other banks follow suit, which is good news for anyone buying or remortgaging right now.”
The average two-year fix still stands at 4.98%, according to Moneyfacts – well above Barclays’ new offer.
