Barclays bank is increasing interest rates on several of its mortgage products for both residential purchase and remortgage applications.
The changes will take effect on March 11th, 2023, and will impact a range of fixed-term products with varying loan-to-value (LTV) ratios.
For residential purchase products, the 2-year fixed rate product with a 60% LTV and no product fee, currently at 4.58%, will increase to 4.90%.
The 2-year fixed rate product with a 75% LTV and no product fee, currently at 4.65%, will increase to 4.97%.
Meanwhile, the 5-year fixed rate product with a 75% LTV and no product fee, currently at 4.16%, will increase to 4.36%.
For remortgage products, the Great Escape 2-year fixed rate product with a 60% LTV and no product fee, currently at 4.58%, will increase to 4.90%.
The Great Escape 2-year fixed rate product with a 75% LTV and no product fee, currently at 4.65%, will increase to 4.97%. The Great Escape 5-year fixed rate product with a 60% LTV and no product fee, currently at 4.15%, will increase to 4.35%.
In addition to the rate changes, Barclays is offering cashback incentives for the Great Escape products. Customers who appoint Barclays’ free standard legal conveyancers can receive £150 cashback, while those who appoint their own solicitors can receive an increased cashback of £500.
For both purchase and remortgage products, the Premier 2-year fixed rate product with a 60% LTV and a £999 product fee, currently at 4.08%, will increase to 4.40%.
The Premier 2-year fixed rate product with a 75% LTV and a £999 product fee, currently at 4.30%, will increase to 4.62%.
The 2-year fixed rate product with an 85% LTV and a £999 product fee, currently at 5.24%, will increase to 5.56%.
The 5-year fixed rate product with a 60% LTV and a £999 product fee, currently at 4.00%, will increase to 4.20%.
The 5-year fixed rate product with a 75% LTV and a £999 product fee, currently at 4.09%, will increase to 4.29%.
Finally, the 5-year fixed rate product with an 85% LTV and a £999 product fee, currently at 4.51%, will increase to 4.71%.
It is worth noting that the minimum loan amount for all of these mortgage products is £5,000, and the maximum loan amount is £2m for most products, with some limited to £570,000.
Reaction
Gary Boakes, director at Verve Financial:
“We’ve now had HSBC, Accord, Platform and Barclays come out with rate increases this week.
“This is not a surprise with the increase in swap rates and the impending Budget and likely base rate increase of 0.25%-5%.
“In the short-term, the market was always going to have its up and downs while inflation and the Bank of England base rate were high. I fully expect more lenders to follow suit this and next week.”
Jamie Lennox, director at Dimora Mortgage:
“It was only a matter of time before Barclays pulled the plug on some of the rates being offered. They’ve been offering some competitive options and with the recent increases seen with swap rates, this was the inevitable outcome.
Samuel Ewen, managing director at Rosehill Financial Services:
“We’ve received the same email regarding the increase in rates, and to make matters worse their systems seem to have crashed. We have a client we’re trying to apply to Barclays for, and if the system issues persist, unless they honour the rates, we’ll miss the window.”
Gareth Davies, director at South Coast Mortgage Services:
“We need to get used to this. Any lender that regularly sits at Number One of the sourcing tables won’t want to stay there for too long. This has been evident with Platform, HSBC, Virgin, Nationwide and now Barclays.”
Graham Cox, director at Self employed mortgage broker SEMH:
“Rising swap rates seem to be the primary cause as several lenders have increased rates this week. Swaps rose approx 0.7% in February, yet Barclays have pushed up their mortgage rates by just 0.2-0.32%. So there’s clearly an attempt to ‘hold the line’ and keep rates as low as possible in a slow market.”
Lewis Shaw, owner and mortgage broker at Riverside Mortgages:
“It’s no surprise that we’re witnessing lenders increasing rates again. It’s been written in the stars for a while. The mortgage market is very tumultuous currently, with lenders both jostling for position in mortgage sourcing tables to fulfil lending targets while keeping an eye on swaps rates to ensure their business is profitable. So it’s never been more important to seek professional advice from an independent mortgage broker.
“Rates are changing daily; today alone, we’ve been told Barclays are increasing by approximately 20-30 basis points, while some products from both Virgin and Halifax are reducing. As brokers, we can react to this before these rates are even available, which is just another in a long line of reasons why savvy homebuyers, movers and remortgagers use good quality brokers to keep them right.”
