Mortgage price war to heat up as Barclays slashes interest rates: 'Promising sign!'
Barclays is cutting mortgage rates
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The UK's mortgage price war is heating up as another high street lender is cutting interest rates to under four per cent.
Barclays is slashing the rate of Premier five-year fixed rate for home buyers with a 40 per cent deposit in a "promising sign" for prospective homebuyers.
The interest rate attached to this product, which has a £899 fee, is being brought down from 4.04 per cent to 3.83 per cent.
This comes into effect as of August 8, 2024.
Furthermore, Barclays is now offering at a five-year fixed rate of 3.84 per cent, for borrowers with a 40 per cent deposit, again with a £899 product fee.
The previous interest rate attached to this product was 4.04 per cent.
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Interest rate hikes have pushed up mortgage repayments for many GETTY As of today, the average two-year fixed residential mortgage rate today is 5.74 per cent which is down from 5.75 per cent the previous working day, Moneyfacts reports. In comparison, the average five-year fixed residential mortgage rate remains unchanged at 5.36 per cent.
Furthermore, the average two-year year buy-to-let residential mortgage rate is down from 5.46 per cent to 5.45 per cent, while its five-year equivalent remains at the same level of 5.42 per cent. This is down from 5.46 per cent the previous working day.
On top of this, Moneyfact found that the average two-year tracker rate has fallen from 5.75 per cent to 5.71 per cent in the space of one day.
In comparison, today's average two-year tracker rate has fallen to the same level over the same period of time.
Last week, the Bank of England slashed the country's base rate from its 16-year high of 5.25 per cent to five per cent.
This comes as much-needed relief for homeowners and those in debt who have been saddled with soaring repayments over the last two years.
Other high street lenders, including HSBC and Nationwide Building Society, have also launched sub-four per cent mortgage products in recent weeks.
Analysts are pricing in further rate cuts from the central bank in the months ahead which could provoke further changes to mortgages.
Rachel Springall, a finance expert at Moneyfacts, broke down the current state of the property market.
She explained: "It’s a promising sign for borrowers to see more rate cuts by some of the biggest lenders in the country as they are in close competition to entice new business.
LATEST DEVELOPMENTS:
Last week, the Bank of England voted to cut interest rates
GETTY"Barclays Mortgages has undercut the competition on initial rate, but we could well see more cuts on the horizon.
"Swap rates (which are used by lenders to price deals) are lower than what they were a month ago, and this, coupled with the recent base rate cut, can encourage lenders to bring mortgage rates down.
"Two weeks ago, Nationwide became the first lender to offer a sub-four per cent mortgage for the first time in months, closely followed by NatWest just last week, and HSBC joined the fray this week.
"Those borrowers who have been holding out to refinance would be wise to seek advice to explore the new deals available to them and select a deal which offers the best value on a ‘true cost’ basis."
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