Brits battling soaring mortgage costs were handed a rare glimmer of hope today as Barclays joined the race to slash interest rates in a dramatic shake-up.
Hot on the heels of eye-catching rate cuts by the Coventry Building Society this morning, Barclays has confirmed it will be reducing key mortgage rates from Tuesday, February 4—with experts calling it a sign of big changes to come.
Mortgage experts pointed to reductions from other lenders, including Accord and the Bank of Ireland, and suggested they are preempting a possible Bank of England base rate cut, expected this Thursday.
Barclays is rolling out a raft of new deals for those looking to buy and people remortgaging.
New products:
5.29% 2 Year Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £570k
4.13% Green Home 5 Year Fixed £899 product fee, 60% LTV, Min loan £5k, Max loan £2m
4.26% Green Home 5 Year Fixed £899 product fee, 75% LTV, Min loan £5k, Max loan £2m
5.24% 2 Year Tracker £0 product fee, 60% LTV, Min loan £5k, Max loan £2m.
Key Purchase product highlights:
4.43% 2 Year Fixed £899 product fee, 60% LTV, Min loan £5k, Max loan £2m, will decrease to 4.38%
4.42% 5 Year Fixed £899 product fee, 75% LTV, Min loan £5k, Max loan £2m, will decrease to 4.36%.
Key Remortgage product highlights:
4.72% 2 Year Fixed £999 product fee, 75% LTV, Min loan £5k, Max loan £2m, will decrease to 4.64%
5.27% 5 Year Fixed £999 product fee, 85% LTV, Min loan £5k, Max loan £2m, will decrease to 5.23%.
Katy Eatenton, of Lifetime Wealth Management, who described today’s mortgage moves as a “manic Monday” , welcomed the reductions. She said: “Every penny counts for borrowers right now. We need more lenders to follow suit.”
Riz Malik, of R3 Wealth, quipped that “Valentine’s Day has arrived early for mortgage holders,” while Harps Garcha, of Brooklyns Financial, said: “After a grim January, this is a rare win for borrowers.”
The ‘rate war’ begins?
While some remain cautious, others believe we could see the long-anticipated “mortgage rate war” kick off.
David Stirling, Director at Mint Mortgages & Protection commented: “With the odds of a rate cut on Thursday being slashed this morning and now looking a nailed-on certainty, Barclays have placed their bets quickly by reducing their mortgage rates in the hope of increased market share.
“The rate war we all anticipated starting in January never came to fruition, but smaller lenders Coventry and Accord both reduced this morning, so competion could potentially heat up. It’s unlikely to help borrowers still looking to get in before the stamp duty changes come in, as that finish line is fast approaching.”
Elliott Culley, of Switch Mortgage Finance, believes the tide is turning after months of painful hikes. “The pendulum is swinging back in favour of borrowers. Barclays have been aggressive with rates, and it’s paying off.”
More to come?
With the Bank of England’s big decision looming, all eyes are now on rival lenders. If this is just the start, mortgage holders struggling with rising costs could finally have something to cheer about.
Stay tuned—this mortgage rate battle is far from over.
Harps Garcha, Director at Brooklyns Financial said: “Let’s hope this isn’t just a fleeting moment and more lenders follow suit to keep the momentum going.”
