Another lowers stress rates
High street lender Barclays has announced rate reductions on selected residential and buy-to-let products, from today, August 30.
On its residential remortgage product range, the rate of the 60% loan-to-value (LTV) two-year fix with a £999 product fee was slashed from 6.13% to 5.98%. The five-year option had its rate cut from 5.52% to 5.37%. Both products have a minimum loan size of £5,000 and a maximum loan size of £2 million.
The rate of the 75% LTV five-year Reward fix with a £999 product fee was also reduced from 5.54% to 5.39%. Loan size is also between £5,000 and £2 million.
“We are taking advantage of a fall in the cost of market funding by reducing rates on a selection of products across our residential and buy-to-let new lending and reward ranges,” the lender stated in its announcement.
News agency Newspage sought the views of brokers, who agreed that while the rate cut was a small 15 basis points on lower LTV products, any rate reduction in today’s mortgage market would always be welcome.
“While these aren’t huge changes, it’s another positive step in the right direction an
d, hopefully, Barclays dropping rates will spur others to follow suit in the near future,” remarked Lewis Shaw, owner and mortgage expert at Shaw Financial Services.
Graham Cox, founder at Self Employed Mortgage Hub, said Barclays, like other lenders, was reducing mortgage rates in response to falling wholesale borrowing costs.
“With August a traditionally quiet month in the housing market, the high street lenders are scrapping it out to maintain transaction volumes and market share,” Cox pointed out.
NatWest brings down stress rates
Another major lender, NatWest, has announced that it is reducing its buy-to-let stress rates.
The lender’s two-year fixed rate stress rates were slashed from 8.60% to 8.15%, its five-year fixes from 7% to 6.78%, and like-for-like remortgages from 8.21% to 7.55%. You can find the latest mortgage rates from NatWest at the link.
“This is a small improvement from NatWest, at a time when fellow competitors Santander have increased their affordability check rates,” commented Justin Moy, managing director at EHF Mortgages. “Both lenders are controlling volumes of business where there is not a significant amount of new buy-to-let lending, as the vast majority of borrowers are exercising product transfers with current lenders, and many smaller landlords are looking to sell.
“Those with larger portfolios will be working with specialist lenders who offer a different type of proposition, whereas high street lenders will hopefully concentrate on bringing down the cost of residential borrowing over the coming months.”
Ben Tadd, director at Lucra Mortgages, added that while reducing the stress rates was a step in the right direction, the tests remained “very, very high across the board in the buy-to-let market.”
“It is still a precarious position to be in for any landlords whose mortgage deals are due to end in the next six to 12 months,” he said. “Until stress tests come down more significantly, the buy-to-let market will remain stagnant in the immediate future, with landlords being very restricted in terms of products they are eligible for.”
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