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- The lowest five-year correction is now 4.1% and the lowest two-year correction is 4.22%.
Another major bank has announced it is cutting mortgage rates, although the market average has slowly risen over the past month, data reveals.
Barclays will reduce several of its fixed rate operations by up to 0.14 percentage points from December 10.
This follows NatWest cutting mortgage rates by up to 0.39 percentage points last week.
Barclays’ cheapest five-year rate will now be 4.11 per cent, although this rate is only available to those looking to buy a home with at least a 40 per cent deposit.
For homeowners who need to remortgage, Barclays is charging 4.12 per cent for those who have at least 40 per cent equity in their home.
Other notable rate cuts include its five-year fixation of 4.22 per cent aimed at those buying a property with a 25 per cent deposit.
Incoming cuts: Barclays is cutting some of its lowest-priced fixed rate offerings
Mortgage brokers welcomed the news as another step in the “right direction” for borrowers.
Justin Moy, chief executive of brokerage EHF Mortgages, told news agency Newspage: ‘While not huge, these are significant and symbolic rate cuts by Barclays.
‘After the budget problem, rates are starting to move in the right direction again.
“Lenders appear to be gearing up to react to the stamp duty time bomb that will drive business through the first quarter of 2025, and competitive rates will put them in pole position rather than leaving them stuck on the starting blocks.”
From 1 April 2025, the thresholds at which people start paying stamp duty on home purchases will return to the levels set before temporary changes were made in 2022.
Andrew Montlake, managing director of mortgage broker Coreco, added: “Right now it’s about every little bit of help as borrowers seek some crumb of comfort in the fact that mortgage rates are starting to stabilize once again.”
Average fixed mortgage rates rise
While cheaper mortgage rates are falling, the average rate across the market has been rising according to rate monitor Moneyfacts.
Over the past month, average two- and five-year fixed-rate mortgage rates rose 0.13 and 0.19 percentage points, to 5.52 percent and 5.28 percent, respectively.
This, it says, was the largest monthly increase in the average five-year fixed rate since August 2023.
Rachel Springall, finance expert at Moneyfacts, said this was because lenders had repriced their products in the face of volatile financial markets.
“This month the average five-year fixed rate saw a notable monthly increase, and through 2024 the rate has not fallen as much as its two-year counterpart,” he said.
‘This will be disappointing news for those borrowers who prefer to secure a long-term deal.
‘It is estimated that there are millions of borrowers who have yet to get their mortgage back in order since rates began to rise in 2021, so it is advisable to seek advice.
‘Those who signed a five-year fixed deal in 2019 would have been charged on average 2.74 per cent, but that rate has almost doubled, now at 5.28 per cent.
“Borrowers will expect mortgage rates to fall next year, and while there is speculation of multiple Bank of England base rate cuts, persistent inflation may delay such decisions.”