Will other lenders follow suit?
Barclays Mortgages has announced reductions in interest rates on a selection of mortgage products, effective from tomorrow, July 5.
For residential purchase-only products, the five-year fixed Premier product with a 60% loan-to-value (LTV) and an £899 product fee will see a decrease from 4.25% to 4.22%.
In the existing customer reward range, the two-year fixed product with a £999 fee at 60% LTV will drop from 4.75% to 4.67%, while the no-fee option will reduce from 4.98% to 4.90%. The two-year fix with a £999 fee at 75% LTV will decrease from 4.90% to 4.75%, with the fee-free alternative getting a reprice from 5.07% to 4.96%.
Barclays, one of the UK’s largest mortgage lenders, will also slash the rates of the two-year fixed product with a £999 fee at 85% LTV from 5.65% to 5.22% and the no-fee one from 5.83% to 5.43%. The two-year fixed product with no fee at over 85% LTV will reduce from 6.07% to 5.87%.
The lender’s five-year fixed product with no fee and 60% LTV will decrease from 4.51% to 4.45%, while the same at 75% LTV will lower from 4.95% to 4.68%. The five-year fix with a £999 fee at 85% LTV will drop from 5.03% to 4.94%, and the same product with no fee will go from 5.25% to 5.03%. The 10-year fix with a £749 fee at 75% LTV will decrease from 5.15% to 4.95%.
For buy-to-let products, the two-year fix with a £1,795 fee at 65% LTV will drop from 5.15% to 4.95%, with the no-fee option reducing from 5.50% to 5.30%. The two-year fixed product with a £1,795 fee at 75% LTV will decrease from 5.20% to 5.00%, while the same without fee will have its rate lowered from 5.54% to 5.34%. The five-year fix with a £1,795 fee at 65% LTV will be repriced from 4.44% to 4.34%.
“With the big five lenders – Barclays, HSBC, Santander, Halifax and NatWest – recently reducing their mortgage rates, lenders continue to jostle for business as they ramp up the summer sales,” said Mark Harris, chief executive of mortgage broker SPF Private Clients. “Those lenders who haven’t yet repriced are likely to follow suit, as long as service levels allow.
“Even though swap rates, which underpin the pricing of fixed rate mortgages, are not showing a consistent downwards trend, the need to generate more business seems to be motivating lenders to tweak their rates.
“It’s good news for borrowers, many of whom are struggling with affordability after successive rate rises and then holds. Expectations of a rate reduction in August are high.”
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