A major bank is cutting some of the mortgage rates it has on offer from Wednesday, following a spate of rate increases by lenders.
Barclays PLC said it will reduce rates on selected products by up to 0.20 percentage points across its residential purchase and remortgage range.
The London-based bank said the move followed a ‘volatile’ period in the swap markets. Swap rates are used by lenders to price mortgages.
Mark Arnold, head of mortgage and savings at Barclays 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.’
The changes include a remortgage deal being offered at 4.3% from Wednesday, down from 4.5% currently.
The product is aimed at borrowers with 25% equity and has 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 broker John Charcol said: ‘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.’
According to financial information website Moneyfacts, the average two-year fixed homeowner mortgage rate on the market on Tuesday is 5.53%, edging down from 5.54% on Monday.
The average five-year fixed mortgage rate is 5.28%, which is unchanged from Monday.
Barclays shares were up 0.1% at 263.80 pence each on Tuesday morning in London.
By Vicky Shaw, PA Personal Finance Correspondent
Press Association: Finance
source: PA
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