Barclays has announced a considerable cut in purchase mortgage rates, which will become effective tomorrow. This reduction is set to provide significant savings for borrowers, with rate cuts as steep as 0.5% across the residential purchase range.
The revised rates show a drop in 2-year fixed-rate products with a 60% loan-to-value (LTV), now offered at 4.17% from a previous 4.62%, and a similar product at 75% LTV reduced from 4.70% to 4.20%. Furthermore, the 2-year Mortgage Guarantee Scheme with a 95% LTV sees rates lower from 5.80% to 5.50%.
Industry professionals have weighed in on Barclays’ move. Gareth Davies, director at South Coast Mortgage Services, sees it as “the best one we’ve seen in 2024 yet.”
He said: “This is a very significant move by Barclays. The best one we’ve seen in 2024 yet. To see 2-year fixed deals edging this much closer to 4% is not something many would have predicted a few months ago.
“With their capacity to handle large business volumes, too, this is a serious shift in the market and other lenders are going to lose a lot of business to them unless they also fall in line. Bravo Barclays.”
Further reaction:
Justin Moy, managing director at EHF Mortgages:
“These are significant rate cuts by Barclays, both for those looking to buy with small and larger deposits. These will definitely be attractive to first-time buyers looking to take advantage of improving market conditions. The January mortgage fire sale is firmly underway.”
Riz Malik, founder & director at R3 Mortgages:
“All cuts are welcome as Barclays battles bravely with the other high street lenders in the rate cut war. We are still waiting on a few but by the end of this week the high street lenders will have all shown their first hand.”
Rob Gill, managing director at Altura Mortgage Finance:
“These cuts from Barclays are the latest salvo in the ongoing rate war as lenders scramble for new business. As long as the inflation outlook continues to improve, the trend of falling mortgage rates that started last year will continue to gather pace.”
Rohit Kohli, director at The Mortgage Stop:
“Rate reductions are always welcome by lenders and Barclays has now fired more shots across the bows of the rest of the high street. Some of these reductions are very positive and it will be interesting to see if these reductions lead to another round of reductions from the rest of the high street.”
Elliott Culley, director at Switch Mortgage Finance:
“Barclays has made a statement today of real intent. They are flying close to the sun with these rates and it may be this is a short-term reduction which clients will have to act fast upon if they want to secure. It will be interesting to see how the other lenders react and whether more will follow suit.”
Mike Staton, director at Staton Mortgages:
“This has always been on the cards with mainstream lenders who are now wanting to join the party. There now seems to be a sense of serenity in the mortgage market and lenders are optimistic about future reductions by the Bank of England. I expect to see rates of 2.8% by the end of 2024. Yes, these will come with lender fees but I am confident this will happen after a reduction in the base rate that I expect to see in May. However, customers should not be led to believe that rates are the be-all and end-all of a mortgage. These rates come with high fees, which may make this an expensive option, especially in the north of England where house prices are relatively low.”
James Bull, mortgage broker at JB Mortgages:
“Very happy to see more and more lenders reducing rates as we head into the new year. This has filtered through into a lot of press coverage as well, hopefully, this will translate to much-improved consumer confidence and a bump in house purchase transactions.”
