Barclays cuts mortgage rates to as low as 3.79%: "Market is in full price war mode"

BARCLAYS has yet again cut mortgage rates - now to as low as 3.79% - as brokers rejoice that the “market is in full price war mode”.

The bank, from tomorrow, is offering better deals for those with larger deposits, at least 25%, including reducing one rate from 4.01% to 3.79%.

Mortgage experts said it would provide better options for those buying and refinancing.

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it could “be the start of a mini-price war”.

He said: "Good news again for borrowers as Barclays reprices more of their products, this time helping those with larger deposits or equity, whether buying or refinancing their homes. 

“This could well be the start of a mini-price war. In reality, I suspect lenders will just wait a couple more weeks until the kids are back at school, and we all look at our credit card statements, reminiscing about the holiday we may need to refinance soon.”

While Ranald Mitchell, Director at Norwich-based Charwin Mortgages, was more confident of a price war.

He said: "Barclays cutting rates again shows the mortgage market is in full price war mode. Competition is heating up fast, and that’s great news for buyers and those looking to remortgage. 

"With the FCA relaxing affordability rules, more borrowers can actually take advantage of these lower rates, giving households some much-needed breathing space, and helping many finally get on the property ladder."

Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, added: “Rate cuts from one of the top six lenders is always a welcome way to start a week. 

"It is expected that other lenders should follow suit to fight for market share which will be positive news for borrowers alongside many lenders recently increasing the amount that can affordably be borrowed.”

Pete Mugleston, Mortgage Advisor & Managing Director at Derby-based onlinemortgageadvisor.co.uk, now expects other banks to lower their rates too.

He said: "Borrowers who held out to see if the Bank of England would cut rates have been rewarded. Barclays has moved quickly with lower rates, and when a big lender makes changes like this it often sets the tone for the rest of the market. 

“In such a competitive environment, it’s likely we’ll see other banks follow suit, which is good news for anyone buying or remortgaging right now.”

Are we going to see more lenders cutting to remain competitive, or wait until the summer holidays are over before they push on with further cuts?

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