Barclays to mop up customers with rate cuts, says uSwitch

Barclays

Barclays has cut the majority of its two year fixed rates mortgages by up to 0.20 percentage points, reducing the NewBuy rate and introducing two new deals to the range.

The changes include a two-year Great Escape remortgage package cut from 3.89% to 3.74% for loans at 70% loan to value (LTV).

Other changes across the range are a reduction of 20 percentage points on the two year fixed at 60% LTV reduced from 3.49% to 3.29%, and from 3.59% to 3.39% at 70% LTV. At 80% LTV the rate will fall from 3.79% to 3.69%.

The NewBuy rate and application fee have also been cut to further support first time buyers or home movers purchasing a new build house or flat with participating builders. The three-year fixed will fall from 6.09% to 5.89% with a £500 reduction in the application fee to £499.

Barclays has also added two mortgages to its range at 65% LTV for loans over £500,000 and available up to £2,000,000 with a two year offset mortgage at base + 2.49% and a two year fixed rate at 2.99%, both come with a £1,999 application fee.

Andy Gray, head of mortgages at Barclays, said: “We are starting to see a trend of more people looking to remortgage in light of recent increases to more than a million borrowers sitting on competitors SVRs.

“Cutting rates today is about giving people the right mortgage at the right time to help secure their monthly payments. A borrower with a mortgage of £150,000, switching from a SVR of 4.79% to the Great Escape fixed at 3.74% could save more than £2,000 over two years if base rate continues to stay at 0.50%.”

Michael Ossei, personal finance spokesperson at uSwitch.com, said: “On the face of it Barclays appears to be swimming against the tide. But this further discount coupled with no fees and cashback on its fixed rate mortgage is an inspired move, as it means that it is now in position to mop up other lenders’ disgruntled customers. And there’s likely to be a sizeable pool of them – just over one million in fact – with Halifax, Co-op, RBS and Santander, to name a few, increasing their standard variable rates from 1 May.

“Barclays is sending these customers a clear signal that it wants their mortgage business – not only is the rate attractive, but there are also no fees which will be a bonus in these hard-pressed times. The rate isn’t market leading, but the fact that there is no fee means that Barclays will be swimming alone in this pool, certainly until another lender wises up to the opportunity of some easy fishing and finds some equally attractive fee-free bait to offer those switching away from SVRs.”