Barclays has cut rates on a selection of mortgages and brokers think more lenders will follow in its footsteps and reduce prices this week.
The bank announced this morning it was shaving the rates on a number of its two- and five-year fixed rate deals for customers who are purchasing a property. The changes will take effect from tomorrow (Tuesday 25 June).
It comes just after the Bank of England maintained the base rate at 5.25% for the seventh consecutive time.
But SWAP rates, which dictate pricing for mortgage lenders, have also fallen recently, which is likely to have had a bigger impact on Barclays’ decision.
Riz Malik, director at R3 Mortgages, talking to the Newspage agency, said: “Barclays is the first lender of the week to improve selected mortgage products but my suspicion is that it won’t be the last.
“Expect further reductions from other high street and specialist lenders this week given improving market pricing. The improvement in SWAPs is great news for borrowers.”
In further good news to borrowers, the size of some of the cuts made by Barclays have also been welcomed by brokers. Indeed, as an example, the lender’s two-year fixed deal for those with a 90% loan-to-value (LTV)) which is currently 5.76% with a £0 product fee, will be cut to 5.48% tomorrow.
Meanwhile, the two-year fixed rate for home buyers who need to borrow at 75% LTV is due to be cut from 5.23% to below the 5% threshold to 4.98%.
Michelle Lawson, director at Lawson Financial, also speaking via Newspage, said: “What a refreshing email to receive from Barclays on a scorchio summer day. These are real reductions in rates, which will have significant benefits for borrowers and are not just a token gesture.”
