Home Money Barclays and Halifax announce further mortgage rate cuts

Barclays and Halifax announce further mortgage rate cuts

0 comments
New special offers: Barclays will offer some of the lowest rates on the market

Barclays has upped the ante in the mortgage price war currently raging between banks and building societies.

Tomorrow, the mortgage lender will cut rates by up to 0.33 percentage points on a wide range of deals for both home buyers and those refinancing their mortgages.

This will result in several new best buys.

Barclays’ announcement follows a series of interest rate cuts in recent weeks.

Halifax has also announced it will cut mortgage rates by up to 0.13 percentage points on certain transactions.

New special offers: Barclays will offer some of the lowest rates on the market

Yesterday, First Direct cut some of the costs of its home loans. On Tuesday, Nationwide and Virgin Money cut rates on certain deals.

And last week, HSBC, Barclays, Yorkshire Building Society, Halifax and Santander also cut their mortgage rates.

Stephen Perkins, managing director of brokerage Yellow Brick Mortgages, told Newspage: ‘The rate cuts wheel has come back around for another spin, with Barclays announcing further rate cuts on the heels of its previous rate cuts.

“This cycle is gathering momentum ahead of an expected cut in the Bank of England’s benchmark interest rates in the near term. All borrowers will benefit from the process.”

Craig Fish, director of Lodestone Mortgages and Protection, added: ‘All lenders continue to make significant rate cuts, not only to gain a share of the increase in business that is going on, but also to reduce borrowing costs for mortgage holders.

“This is excellent news and it really does seem like a new rate war has begun.”

What are the cheapest mortgage rates?

While these rates will still seem high to many people buying or refinancing their mortgage right now, Barclays’ latest move brings the lowest rates back closer to where they were at the start of the year.

Those who buy with deposits of 40 per cent or more can now get a five-year fixed rate of 4.09 per cent with Barclays. The deal includes a fee of £899.

The next best five-year interest rate on the market is 4.2 percent, while the average five-year interest rate is 5.51 percent, according to Moneyfacts.

This means that someone buying a home with a £200,000 mortgage repaid over 25 years would expect to pay £1,066 a month under this Barclays deal.

The same person paying the average market rate would end up paying £1,229 a month, which equates to £163 more each month or £1,956 over a year.

Anyone who buys with a 25 per cent deposit will also be able to get a market-leading five-year fixed rate of 4.24 per cent with Barclays, starting tomorrow. This transaction is commission-free.

The next best 75 percent loan-to-value mortgage product on the market is offered by HSBC at 4.37 percent.

Barclays will also be offering the lowest two-year fixed-rate mortgage. Someone buying with a deposit of 40 per cent or more will be able to get a 4.52 per cent interest rate with Barclays. This carries a fee of £899.

The next lowest two-year fixed mortgage rate is Halifax’s 4.63 per cent, with a fee of £1,099.

Homeowners who are about to refinance their mortgage will also be able to benefit from Barclays’ latest changes.

Its lowest five-year fixed rate, aimed at those remortgaging and with at least 40 per cent equity in their home, will be 4.36 per cent from tomorrow, with a fee of £999.

That equals NatWest as the lowest tariff on the market. However, NatWest’s deal carries a higher fee of £1,544.

Barclays premium banking customers can get even better results. The lowest interest rate they can get from tomorrow is 4.31 per cent, with a fee of £999.

Rate cuts: Nationwide also announced it would cut mortgage rates earlier this week.

Rate cuts: Nationwide also announced it would cut mortgage rates earlier this week.

Anyone who refinances their mortgage and wants to fix it for two years will be able to get a new best buy with Barclays tomorrow, if they have at least 40 per cent equity in their home.

The lowest two-year fixed rate, aimed at those refinancing their mortgages, drops from 5.01 percent to 4.7 percent. Premier banking customers can get an even better rate and opt for a rate of 4.67 percent.

Randall Mitchell, director of brokerage Charwin Mortgages, told Newspage: “Barclays’ rate cuts are fantastic news and a continuation of the fight for top spot. With new two- and five-year fixed rates, mortgages are becoming more affordable for everyone.”

‘These changes are a great advantage for home buyers and those who wish to refinance their mortgage.’

Justin Moy, chief executive of EHF Mortgages, added: “Barclays has slashed interest rates, putting traditional lenders in a bind. Longer-term deals in particular are looking more attractive.”

Some brokers believe rates are likely to fall further in the coming weeks as lenders compete for business.

Ben Tadd, director of Lucra Mortgages, said: ‘Barclays is adding fuel to the fire by cutting rates in quick succession.

‘The other big six lenders are likely to follow suit to stay in touch at the top of the rates tables, leading to a domino effect in the market with other smaller lenders forced to act as well.’

money" data-version="2" id="mol-6d803460-127b-11ee-b5fa-b53b886c1257" data-permabox-url="https://www.dailymail.co.uk/money/mortgageshome/fb-13571667/How-new-mortgage.html">

How to find a new mortgage

Borrowers who need a mortgage because their current fixed-rate contract is ending or are purchasing a home should explore their options as soon as possible.

What if I need to refinance my mortgage?

Borrowers should compare rates, talk to a mortgage broker and be prepared to act.

Landlords can close a new deal six to nine months in advance, often with no obligation to accept it.

Most mortgage agreements allow fees to be added to the loan and only charged at the time of contracting. This means borrowers can lock in a rate without paying costly origination fees.

Please note that by doing this and not paying off the fee at the end, interest will be paid on the fee amount for the entire term of the loan, so this may not be the best option for everyone.

What if I’m buying a house?

Those with home purchases lined up should also try to get rates as soon as possible, so they know exactly what their monthly payments will be.

Buyers should avoid over-stretching themselves and be aware that home prices can fall as higher mortgage rates limit people’s borrowing capacity and purchasing power.

How to compare mortgage costs

The best way to compare mortgage costs and find the right deal for you is to speak to a broker.

This is Money has a long-standing partnership with free broker L&C, to provide you with expert, free mortgage advice.

Are you interested in seeing today’s best mortgage rates? Use This is the best mortgage rate calculator from Money and L&C to display offers that match your home value, mortgage size, term, and fixed rate needs.

If you’re ready to find your next mortgage, why not use L&C’s Online Mortgage Finder? This will search through thousands of offers from over 90 different lenders to discover the best option for you.

> Find your best mortgage offer with This is Money and L&C

Please note that rates can change quickly, so if you need a mortgage or want to compare rates, speak to L&C as soon as possible so they can help you find the right mortgage for you.

The mortgage service is provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registration number: 143002). The FCA does not regulate most buy-to-let mortgages. Your home or property may be repossessed if you fail to keep up your mortgage payments.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationships to affect our editorial independence.

You may also like