Barclays cuts mortgage rates

 

Competition in the mortgage market was stepped up today as
Barclays announced it is cutting a raft of rates in its fixed deal
range.

The bank, which is working to rebuild its customer reputation following its Libor-fixing scandal, said it will lower six of its deals on offer by up to 0.3 percentage points from tomorrow.

The new fixed deals include a market-leading two-year mortgage at 3.29% with no application fee, although customers will need a sizeable 30% deposit to take it up.

The lender is dropping its five-year fixed-rate at 70% loan-to-value (LTV) by 0.3 percentage points, to a rate of 3.99%, the lowest five-year deal Barclays has offered this year.

It is also dropping the rate on its two-year fixed deal for people with a 40% deposit by 0.2 percentage points to 3.09%. These deals come with a £999 application fee or £499 for those who qualify for a Barclays loyalty mortgage.

Lenders generally have been raising their rates and tightening their borrowing criteria amid the weak economy, and those with a low deposit are expected to have a particularly tough time finding a deal in the coming months.

However, there have been signs of increased competition in recent weeks among lenders to attract less "risky" customers with larger deposits.

Earlier this month, HSBC launched a five-year fixed rate mortgage with a record low rate of 2.99%, although customers will need a 40% deposit to take it up and a £1,499 booking fee.

Santander also launched a five-year fix at 2.99% last week with a £1,495 fee for its customers with a 40% deposit.

Rachel Springall, spokeswoman for comparison website Moneyfacts, said: "The new two-year fixed deal from Barclays at 3.29% is the lowest rate on the market at 70% loan-to-value.

"There is no fee to pay which will be good news to borrowers looking to keep up front costs down."

A high street banking report found today that mortgage approvals hit their lowest numbers in at least 15 years last month.

The British Bankers' Association (BBA) figures also showed that mortgage approvals for house purchase were at their lowest since January 2009. House purchase mortgage approvals are a fifth lower than they were a year ago.

Mortgage lending generally is expected to remain weak in the coming months amid the uncertain economy and the ongoing eurozone crisis.

Fixed mortgage costs are influenced by money market swap rates, which have been falling.

Andy Gray, head of mortgages at Barclays, said: "We have recently seen an improvement in the swap rates and so we've taken the opportunity to pass these benefits onto customers by reducing some of our more popular fixed rates to give them some great deals - including a five-year rate below 4%, the lowest we've offered this year."

PA

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones