Save, make, understand money


Barclays back with a bang as it slashes suite of mortgage rates

Barclays back with a bang as it slashes suite of mortgage rates
Anna Sagar
Written By:
Anna Sagar

Barclays will cut mortgage rates by up to 0.43% across its residential, buy-to-let purchase and remortgage ranges, with experts suggesting the move could spark a flurry of reductions from competitors as we head into 2024.

The lending giant confirmed it had reviewed its offering against “market funding conditions” with changes to its mortgage rates set to come into effect tomorrow – Wednesday 20 December.

The standout reduction is on its five-year fixed rate residential purchase and remortgage offer (70% loan-to-value), which comes with a £1,999 product fee and a minimum £2m loan.

For industry experts, they’ve described the cuts as Barclays showing some “Christmas spirit” as it capitalises on the traditionally quiet festive period.

For others, the move is likely to fuel a mortgage rate war with other competitors expected to follow suit.

Posting on Newspage, Rob Gill, managing director at Altura Mortgage Finance, wrote: “We are moving ever closer to a mainstream residential mortgage rate starting with a ‘3’ as lenders position themselves to start 2024 with a bang. Barclays are one of the biggest lenders in the country and we expect to see other lenders react accordingly.”

Justin Moy, managing director at EHF Mortgages, posted: “I’m surprised to see any rate changes in the days up to Christmas, but Barclays are entering into the spirit with these rate cuts across their range. This latest set of changes helps home movers, remortgagors and buy-to-let clients in particular, spreading joy to many, not a few.”

Gary Bush, financial adviser at MortgageShop.com, added: “Barclays reducing fixed rates across its mortgage range by up to 0.43% at this time of year is the gift that keeps on giving. This will lead to other lenders following suit. The UK mortgage rate war that has been raging since August goes up a gear as we move into 2024, which will help to kick off New Year activity for both purchases and remortgages.”

Barclays mortgage rate cuts

Within its residential range, select standard, premier, green home and mortgage guarantee scheme products will be cut.

An example includes its two-year fixed rate at 60% LTV with the £899 fee falling to 4.62% and its fee-free version going down to 4.76%.

In its remortgage-only range, selected premier, standard and great escape products have been cut.

Its two-year fixed no-fee great escape product at 60% LTV will decrease to 4.81% and at 75% LTV, the product rate will fall to 4.92%.

On the purchase and remortgage side similar cuts have been made, with its two-year fixed rate at 60% LTV with a £1,999 fee decreasing to 4.8%.

Buy-to-let, purchase, remortgage, and purchase and remortgage products

In one example, its two-year fixed rate purchase-only product with a £1,295 fee at 75% LTV will fall to 6.18%.

Its fee-free remortgage product at 60% LTV will fall to 6.3% and its two-year fixed rate with a £2,495 fee at the same LTV will come to 6.3% as well.

In its rewards ranges, residential and buy-to-let products have been cut. This includes its residential EMC reward one-year fixed rate with no fee at 60% LTV offered at 4.81%.

Its buy-to-let EMC reward two-year fixed rate with no fee at 65% LTV will go down to 6.15%.

The lender previously lowered rates at the beginning of December, with the cuts applying to residential purchase-only products.

Swap rates, which are a key factor in mortgage pricing, have been gradually falling over the past few weeks as the Bank of England’s decision to keep the base rate stable has restored confidence in the market and led to a more optimistic interest rate outlook.