Barclays Slashes Interest Rates on Mortgages

Barclays Bank has cut the rates on a third of its fixed and tracker mortgages – and is now offering its cheapest mortgage deal for the last decade and a half.

The record low base rate of interest set by the Bank of England is finally filtering through to consumers, with Barclays becoming the latest in a long line of mortgage lenders to continue cutting their rates.

And in this case, Barclays has gone the extra mile by offering its lowest fixed-rate mortgage for the last 15 years in the form of a 2-year, 70% LTV fixed-rate mortgage at 2.49%. It’s for existing customers who qualify for a Barclays Loyalty mortgage – and it offers a fall of 0.5% compared to previous rates. All other customers will receive a 2.54% rate.

The five-year fixed-rate 70% LTV mortgage is now 3.88% for a Loyalty mortgage and 3.98% for all other customers.

Barclays has also cut rates on its 80% and 85% LTV mortgages, helping prospective borrowers who can only provide a smaller deposit.

These deals include the Great Escape remortgage package. This offer the customers the chance to remortgage at a two-year fixed rate of of 4.19% (down from 4.69%). Moreover, there’s no application fee and Barclays is offering free legal work and a free valuation. On top of that, customers will receive £300 cashback to cover the cost of any exit-fees imposed by their current lender.

Barclays is also appealing to first-time buyers with two new FirstBuy Direct mortgages which support the Government’s FirstBuy scheme – allowing new buyers to afford a mortgage with a smaller deposit.

The latest reduction in mortgage rates is the sixth consecutive one by the bank as competition grows between lenders. This is largely thanks to the Bank of England holding the base rate at its current level and economists predicting that it could stay that way until 2012 or even 2013.

Head of mortgages for Barclays, Andy Gray, said: “These latest deals provide borrowers with the opportunity to lock in at a great rate now and protect themselves against future base rate increases.”

Moneyhighstreet comments: “Increased competition among lenders is great news for consumers and the new rates offered by Barclays are some of the best on the market.

“With Barclays also supporting the Government’s FirstBuy scheme, things are looking up for first-time buyers – especially as rents continue to rise across the country.

“If the Bank of England holds the base rate steady, we may see even better deals to come as lenders compete for new customers, but the current market is showing itself to be favourable to buyers.

“If you already have a mortgage you bought earlier at a higher rate, Barclays’ Great Escape remortgage offer demonstrates that you don’t have to be stuck with high interest rates as new buyers take advantage of lower rates.”