A major bank is set to lower some of its mortgage rates starting tomorrow. Barclays announced that it will be reducing rates on selected products by up to 0.20 percentage points across its residential purchase and remortgage range. This decision comes after a period of volatility in the swap markets, which are used by lenders to determine mortgage pricing.
The recent trend among major lenders has been to increase mortgage rates due to the swap rate environment. Despite the Bank of England’s recent quarter-point cut in the base interest rate to 4.75 per cent, finance experts predict that rates will decrease more slowly than previously anticipated given the current economic conditions.
Barclays’ head of mortgage and savings, Mark Arnold, expressed his satisfaction with the ability to lower core mortgage rates in response to market changes. The bank aims to pass on benefits to its mortgage customers promptly whenever there is an opportunity in the swap markets.
One of the notable changes includes a remortgage deal at 4.3 per cent starting tomorrow, down from the current rate of 4.5 per cent. This product is designed for borrowers with 25 per cent equity and comes with a £999 fee. Nicholas Mendes, mortgage technical manager at broker John Charcol, commended Barclays for being the first high street lender to reduce mortgage rates in response to market conditions. The move is seen as a positive step in the mortgage landscape, offering some relief to borrowers amidst rising rates from other lenders.
In addition, the average two-year fixed homeowner mortgage rate on the market was recorded at 5.53 per cent on Tuesday, slightly lower than Monday’s rate of 5.54 per cent. The average five-year fixed mortgage rate remained unchanged at 5.28 per cent. These developments indicate a potential shift in the borrowing climate as lenders like Barclays respond to market changes.
Overall, the decision by Barclays to lower mortgage rates reflects a positive trend in the industry, providing borrowers with some breathing room amidst economic uncertainties. As conditions stabilize, more lenders may follow suit in repricing their mortgage offerings, offering hope to those navigating the current borrowing environment.