Barclays has launched a raft of new home loans for both residential purchases and buy-to-let deals with reductions of up to 0.66 percent.
The reductions means the starting rate on one two-year fix based on a loan at no more than 60 percent of the property value has come down to a competitive 4.4 percent.
However the mortgage along with others being launched come with a hefty fee of £1,999, which may put a number of people off. At the same time some of the best deals are being reserved for those taking out mega mortgages of between £2m and £10m.
The move by Barclays follows a reduction earlier in the day from the TSB while other lenders are expected to follow suit over the next few days.
Ranald Mitchell, Director at Charwin Mortgages, said: “These larger reductions signal a fierce competition among lenders, with no signs of letting up.
“For consumers, this is great news. Lower rates mean more affordable mortgages, increasing accessibility for first-time buyers and those looking to remortgage. The property market stands to benefit as well, with these competitive rates likely to fuel buyer activity.”
Elliott Culley, Director at Switch Mortgage Finance, said: “Barclays have adjusted a selection of their current rates at lower LTVs.
“These products also have large product fees, so only a small selection of borrowers are likely to benefit from these rate changes as the higher product fee makes it only cost-effective for borrowers with larger mortgage balances than average.”
Hannah Bashford, Director at Model Financial Solutions, told Newspage: “Not to be caught off guard, Barclays immediately followed TSB in reducing rates this morning.
“This is welcome news for borrowers and will help build confidence for customers looking to purchase a new property or remortgage.”
Tony Castle, Managing Director at PFG Mortgages, said the rate cuts offer a “cracking start to the week”.
He added: “The downward trend in mortgage rates continues and autumn has a spring in its step.”
Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments, said: “With rates being slashed across the board, the winds of change are howling, and they’re carrying the sweet scent of affordability for homeowners.
“These across-the-board rate cuts reflect a cautious optimism despite economic headwinds and may indicate a gradual loosening of lending conditions as we approach the end of 2024.”
Ben Perks, Managing Director at Orchard Financial Advisers, complained the best deals were being reserved for the wealthy.
He said: “Barclays are helping the rich get richer and giving their chunkiest cuts to loans over £2m. But it’s not all doom and gloom for your everyday borrower as they have given some reasonable cuts, too. The lenders are still battling it out on rates and it is great to see.”
Patricia McGirr, Founder at Repossession Rescue Network, said: “It looks like Barclays are keen to attract customers at the higher end of the market here, but it’s always good news to see more rate cuts at the start of a new week.
“The hefty fees may be off-putting for some, but this doesn’t tell the whole story. Borrowers need to look at the total cost of their deal in real terms so they can compare offers from different lenders.”
Justin Moy, Managing Director at EHF Mortgages, said there are some good reductions for buy-to-let landlords. “The improved affordability will be welcome for those with tight rental calculations or looking to borrow more,” he said.
Simon Bridgland, Director at Release Freedom, was sceptical, saying: ”You could likely count on one hand the number of borrowers looking to go between £2-£10m in loan size and for those that do there are already offers which both compete and beat the new options becoming available.”
Iain Swatton, Director at Exemplar Financial Services, described the rate cuts as “fantastic news for anyone looking to buy or remortgage”.
