Barclays says this could give them a financial cushion of up to £5,000 in saved mortgage payments, based on its base rate forecast for the next two years.
The largest cut taking place is on the two year fixed rate deal at 75% loan to value (LTV), being cut by 0.32% from 3.89% to 3.57%. Key reductions are also being made on the Great Escape remortgage package for those borrowers who are concerned about base rate and want to fix their repayments. They can remortgage onto the Great Escape two year fixed rate deal where the rate has been cut from 3.99% to 3.79%, a reduction of 0.20% - making the low rate available to more customers as the LTV has recently been extended from 60% to a maximum of 70% LTV.
Alternatively, The Great Escape package is also available as a tracker at 70% LTV with the rate cut from 2.59% above base rate to 2.39% over base, or at 75% LTV with the rate reduced from 2.79% above base rate to 2.69% over base.
All borrowers taking up a tracker deal will be eligible for "Switch and Fix" which enables them to switch to a fixed rate whenever they choose without penalty. This feature has proved popular as it allows customers to benefit from a tracker rate while base rate is very low now, but with the security of being able to switch to a fixed rate should they become concerned about future interest rate rises.
Available to existing and new customers who are purchasing or remortgaging, Barclays’ lowest tracker mortgage is the loyalty tracker mortgage, cut from 2.09% to 1.89% above base rate for a maximum LTV of 70%. The equivalent lifetime rate for customers who do not qualify for the loyalty deal is reduced from 2.29% to 1.99% above base, a cut of 0.30%.
Two new capped rate deals will also be added to the range giving borrowers the best of both worlds - the flexibility of low base rates and the protection for when rates start to rise - either over three or five years, both at 2.70% above base and a maximum 70% LTV with a guarantee that the customers payment rate will not increase beyond 4.99% (3 year capped) and 5.99% (5 year capped).
Andy Gray, head of mortgages for Barclays, said: "The cuts today are about jump-starting thousands of borrowers to take action as their mortgage payments will be impacted when base rate starts to rise which could be as early as next month with a steady rise up to 3% by June 2013.
“Many mortgage borrowers breathed easy this month when the base rate didn't go up so now they need to take urgent action to really start protecting themselves for at least the next two years. Huge savings can be made for the thousands of borrowers on their lenders’ SVR, for example a borrower with a mortgage of £150,000, switching from an SVR today at 4.79% to the new Woolwich Great Escape fixed at 3.79% could save around £5,000 over 2 years if base rate moves as forecast. This is just what borrowers need at a time when they could be concerned about potential rises in the Bank of England base rate.”
