Barclays is cutting mortgage rates from today, offering borrowers some ‘breathing space’ after several weeks of price rises.
The lender has shaved up to 0.20% discount on a selection of mortgages for both home buyers and people who are refinancing.
According to Nicholas Mendes, mortgage technical manager at John Charcol, the price cuts come as the swap rate, which lenders use to set their prices, is just starting to fall.
In previous weeks, despite the fact interest rates were reduced by 0.25% to 4.75%mortgage providers had raised prices in response to rising swap rates.
But Barclays has become the first lender to buck this trend.
Mendes said: “Barclays has taken a bold step as the first major lender to cut mortgage rates in response to recent market changes.
“With swap rates falling in recent days, it is great to see a lender acting quickly to reflect the slightly improving conditions.”
One of the highlights of Barclays’ price cuts is a two-year fixed rate deal at a 90% loan-to-value (LTV) with no fees attached, as was reduced from 5.49% to 5.39% .
One of the lowest rates available is for remortgagers: the five-year fixed rate with a 60% LTV and a £999 fee has been reduced from 4.37% to 4.17%.
Mendes said: “While these cuts won’t change the world, they do provide some breathing room for borrowers, especially after the recent crisis. trend of rising interest rates among major lenders.
“This could also indicate the potential for more price revisions in the market if conditions remain stable. It is a small but positive step in the mortgage landscape, bringing a glimmer of hope to those in the current lending climate.”
According to Moneyfacts.co.uk, the average two-year mortgage rate is currently 5.53% – no change from a week ago.
For a five-year mortgage, the average interest rate is 5.28%, which is slightly higher than the 5.26% on Wednesday, November 20 – a week ago.
Mark Arnold, head of mortgages and savings at Barclays, said: “I am delighted that we can cut core mortgage rates again after a very volatile period in the swap markets.
“As we have done over the course of this year, when we see an opportunity in the swap markets, we will act quickly to pass the benefit on to our mortgage customers.”