Barclays has cut mortgage rates again and is undercutting the competition with a rate of 3.96% on its Green Home mortgage.
The lender has added another product into the sub-4% market after Nationwide introduced a five-year fixed rate at 3.99% on Thursday last week.
According to mortgage broker, Mortgage Lane, there are five major lenders now offering mortgage rates below 4% – Nationwide, Santander, HSBC, Barclays and First Direct.
Now Barclays’ latest sub-4% offering will add an edge to the competition with its even lower rate for the Green Home five-year fixed rate.
The deal comes with a fee of £899 and is available for those who need to borrow up to 60% of the property’s value – ie at 60% loan-to-value (LTV).
It’s for customers are buying an energy-efficient new-build home directly from the builder or developer. Therefore, the home will need an energy efficiency rating of 81 or above, or have an Energy Performance Certificate (EPC) in band A or B.
Barclay is also making other reductions of up to 0.48% on other products and it has increased the maximum loan amount for 90% LTV purchases for houses and flats.
The cap for houses has increased from £570k to £640k, while the cap for flats has increased from £275k to £310k.
All the changes are due to come into force on Tuesday 4 March.
Sian McIntyre, managing director of mortgages and savings at Barclays, said: “With bills and costs rising, we know how challenging homebuyers are finding things right now.
“We’ve introduced several rate drops already this year across our mortgage range, making a real difference in affordability, and we’re delighted to announce more rate cuts.
“This includes bringing our Green Home mortgage even further below 4%, making it the lowest five-year fixed rate available on the market.”
Advice for borrowers reaching the end of their mortgage deal
If you are due to remortgage having come to the end of your current mortgage deal, the advice from experts is to speak to a broker about your best option.
Many of the headline rates below 4% are for borrowers who have at least 40% equity or – in the case of Barclays’ offering – for those buying homes with strong green credentials. This means they are not widely available to all.
However this does not mean you cannot find a competitive rate for your own circumstances.
Joseph Lane, founder and director of Mortgage Lane, said: “When major lenders reduce their rates, it often prompts a response from others to stay competitive, particularly if they notice an increase in applications or market share shifts towards the lenders who have lowered their rates.”
He added: “For those looking to remortgage, the best approach is to thoroughly research and compare different mortgage offers.
“Consider consulting with a mortgage broker who can provide insights into deals that may not be directly available and can offer a comparative analysis based on your specific financial circumstances.
“It’s also important to look beyond interest rates; consider factors such as fees, the flexibility of the loan terms, and other features that might impact the overall cost and suitability of the mortgage.”
