The rate reductions mark a shift for the bank, which had recently raised interest rates
High street lender Barclays is set to lower interest rates on a selection of its residential mortgage products, with reductions of up to 0.26 percentage points.
The rate changes will take effect tomorrow, October 29, across a range of products for both purchases and remortgages.
The rate cuts affect two-year fixed rate deals for both new purchase and remortgage customers, as well as certain 10-year fixed products. Notably, the Premier two-year fixed product with a £899 fee at 60% loan-to-value (LTV) will see its rate reduced from 4.07% to 3.96%.
Meanwhile, the Green Home two-year fixed option, designed to incentivise energy-efficient homes, will drop from 4.29% to 4.11% at 60% LTV.
For remortgage customers, rates are being lowered on multiple options, including the lender’s Great Escape two-year fixed, which is fee-free and available at 60% LTV. The rate on this product will decrease from 4.56% to 4.38%.
The bank – one of the UK’s largest mortgage lenders – is also adjusting rates on high-value products. The two-year fixed rate option with a £1,999 fee, available for loans between £2 million and £10 million at 60% LTV, will drop from 4.19% to 4.03%.
The cuts extend to Barclays’ existing customer reward range, where rates on the EMC Reward two-year fixed for 75% LTV will be reduced from 4.34% to 4.28%. The EMC Reward 10-year fixed product at 75% LTV will decrease from 4.95% to 4.85%.
The rate cuts represent a shift for Barclays, which had joined other lenders in raising mortgage rates amid uncertainty in international markets over potential government borrowing expected in the upcoming Labour budget.
“Barclays’ recent rate reductions across its mortgage products come at a crucial time, following weeks of budget speculation and recalibration in market pricing,” said Nicholas Mendes, mortgage technical manager at John Charcol. “This move demonstrates Barclays’ responsiveness to market conditions and aims to improve affordability for prospective and current homeowners.
“Expectations for a doom-and-gloom budget on Wednesday have softened. While business impacts are anticipated, consumers and mortgage rates are unlikely to be affected by any announcements.”
Barclays has recently reported a strong third quarter performance, with profits boosted by its UK retail division and lower-than-expected bad loan impairment.
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