Brokers have welcomed Barclays‘ return of sub-4% mortgage rates, describing the move as a “significant” moment for the market.
From today, the high street lender will reduce its two-year 80% LTV fixed rate for purchases with a product fee of £899 from 4.05% to 3.98%, along with further cuts at higher loan-to-values. Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions, described the move as a “turning point” for the market. He said: “Barclays reintroducing a sub-4% mortgage at 80% loan-to-value is significant. Rates have been up and down all year, leaving borrowers frustrated by constant uncertainty.
“To see a mainstream lender dip below 4% again at this loan-to-value feels like a turning point and hopefully the start of some stability as we move towards a new normal in mortgage interest rates.”
Omer Mehmet, managing director at Welling-based Trinity Finance, said: “Barclays trimming rates is a welcome move, especially at higher loan-to-values where first-time buyers feel the pinch. A cut from 4.87% to 4.80% on a 95% deal may not sound seismic, but it shows lenders are sharpening their pencils as competition heats up.
“With every fraction of a percent mattering to stretched borrowers, the question now is whether other high-street banks will follow and spark a rate war.”
Babek Ismayil, CEO at homebuying platform OneDome, also welcomed the rate changes, adding the move shows “lenders are doing their best to get the market firing after the summer lull.”
She added: “Even small cuts can generate important savings for borrowers at a time when finances are stretched and affordability is a struggle.”
Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, said Barclays has been at the front of the pack most of the year.
He said: “Barclays have been strong all year in terms of offering competitive products. There hasn’t been much movement in the market recently, with most lenders moving up rather than down, but Barclays have bucked this trend on a couple of occasions, showing a strong appetite to lend.”
Aaron Strutt, product and communications director at London-based Trinity Financial said: “Some of the best buy rates are coming back down again, which is welcome news given that more price hikes had been predicted. Nationwide and Halifax have already lowered their prices, so Barclays is probably reacting to their changes.
“The upcoming Budget seems to have taken some of the heat out of the property market, so once again rates need to drop to liven things up.”
