Barclays said the move followed a ‘volatile’ period in the swap markets
A major bank has announced it will be slashing some of its mortgage rates from Wednesday, following a series of rate increases by other lenders.
Barclays plans to cut rates on certain products by up to 0.20 percentage points within its range of residential purchase and remortgage offerings, after what’s been described as a volatile period in the swap markets. Swap rates are used by lenders to price mortgages.
Barclays’ head of mortgage and savings, Mark Arnold, said: “I’m delighted we’re able to decrease core mortgage rates again, after what has been a very volatile period in the swap markets.
“As we have done during the course of this year, when we see an opportunity in the swap markets we will act swiftly to pass on the benefit to our mortgage customers.”
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Among the offerings is a revamped remortgage deal set at 4.3%, dropping from the current 4.5%, aimed at borrowers with a 25% equity stake and includes a £999 fee.
In recent weeks, major lenders have been hiking a selection of mortgage rates, citing the swap rate environment.
The Bank of England recently reduced the base interest rate to 4.75%, a quarter-point cut, marking the second time interest rates have been cut this year. However, finance experts are expecting rates to reduce more gradually than previously expected amid the wider economic environment.
Nicholas Mendes, mortgage technical manager at John Charcol, commented: “Barclays has made a bold move as the first high street lender to cut mortgage rates in response to recent market changes. With swap rates easing over the past couple of days, it’s great to see a lender acting quickly to reflect the slightly improving conditions.
“Some standout reductions include the two-year fixed at 90% loan-to-value (LTV) with no product fee, dropping from 5.49% to 5.39%.”
He added: “While these reductions won’t change the world, they do offer a bit of breathing room for borrowers, especially after the recent trend of rising rates among high street lenders.
“This could also signal the potential for more repricing across the market if conditions remain stable. It’s a small but positive step in the mortgage landscape, bringing a glimmer of hope to those navigating the current borrowing climate.”
Financial information website Moneyfacts reports that the average two-year fixed homeowner mortgage rate stood at 5.53% on Tuesday, showing a marginal decline from Monday’s 5.54%. Meanwhile, the average five-year fixed mortgage rate remained steady at 5.28%.
