Barclays is reportedly making cuts to a selection of mortgage products across its residential purchase, remortgage and reward ranges, which could help those looking to buy.
According to Sky News, the most notable rate change will be the bank’s five-year fixed rate for home buyers with a 60% loan-to-value (LTV) ratio and a £899 product fee, which has been reduced to 3.84%.
The previous rate on the product was 4.04%. Meanwhile, its 4.61% two-year fixed rate will decrease to 4.43%.
The changes come as The Bank of England base rate was reduced last week from 5.25% to 5%. However, lenders had already been slashing rates in the weeks leading up to the reductions.
Stephen Perkins, managing director at Yellow Brick Mortgages, told Newspagethat more lenders going sub 4% was “greatly welcomed”.
“Barclays have made a real statement of intent here. It’s game on in the mortgage market now,” he said.
Meanwhile, Riz Malik, director at R3 Mortgages, told the news outlet that the “post-base rate cut bonanza from Barclays will help drive confidence among borrowers and in the UK housing market”.
What is a mortgage rate?
Mortgage rates determine how much the balance of your mortgage loan will grow each month as you pay back your provider. The higher the interest rate, the higher your monthly repayments.
Interest rates are always calculated as a percentage of your mortgage’s balance.
If you have a repayment mortgage – which most people do – you’ll pay a set amount of your balance back each month plus interest on top of that. Those with interest-only mortgages pay interest but none of the capital.
Further reading
Purchases – Oakwood Property Solicitors
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