"Bonanza set of rate reductions from Barclays before the Budget"

​​​​​​​BROKERS have applauded Barclays for a round of chunky rate cuts at higher loan-to-values with just two weeks to go to the Budget. The lender has today announced further cuts in rates for purchase, remortgage and existing borrowers looking for a new deal. With 85% loan-to-value deals nearly crossing the 4% threshold, brokers say these rate cuts are significant for borrowers both old and new.

Notable cuts are a 4.19% 2-year fixed rate purchase mortgage with a £899 product fee available at 85% LTV, which will decrease to 4.02%. Meanwhile, a 4.43% 2-year fixed purchase mortgage with no product fee at 85% LTV will come down to 4.26%. A 4.22% 5-year fixed purchase mortgage with an £899 product fee at 85% LTV will drop to 4.12%.

Michelle Lawson, Director at Fareham-based Lawson Financial, said: "This is a bonanza set of rate reductions from Barclays before the Budget. Borrowers should take note.

"Lenders are desperate to hit their targets and rates are coming down as a result. Rates are within touching distance of 4% for borrowers with a 15% deposit, which is quite some achievement in the current climate."

Cameron Scott, Broker at Archie John Financial, added: “Rate reductions like this can really help take the pressure off borrowers, giving them all-important extra disposable income in what is becoming a tough economic climate.

"Inflation is stubbornly high and households need all the support they can get and lower mortgage rates help deliver this. Bravo to Barclays for delivering these cuts."

Omer Mehmet, Managing Director at Welling-based Trinity Finance, said rates are moving in the right direction ahead of the Budget.

He continued: "With unemployment at 5%, the chances of a rate cut may well have increased. Of course, the Budget has the potential to throw a huge spanner in the works so borrowers may be advised to take action now before these rates potentially disappear."

Harps Garcha, Director at Slough-based Brooklyns Financial, said “it looks like the festive season has arrived early for borrowers, with 2-year fixed rates closing in on 4% at 85% loan-to-value”.

She continued: "The housing market is slowing and lenders are clearly trying to hit their year end targets, so it’s a pretty good moment for anyone with a mortgage to make the most of it.

"I’m sure we’ll see more lenders joining in over the next few days, but how long this little burst of generosity will last is anyone’s guess with the Budget approaching.”

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said these are important rate cuts.

He added: “There is certainly a whiff of competitive spirit on the High Street as lenders look to grab some mortgages before the end of the year.

"A lot will rest on the output of the Budget in two weeks' time, but for those with smaller deposits, a 15% deposit nearly qualifies you for a 4% deal. That's some serious progress in rate pricing in recent months.”

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said “Barclays has just fired another big shot in what’s fast becoming an early pre-Budget rate cut war”.

He added: "These are chunky reductions at higher LTVs, territory that really matters to everyday buyers and movers.

"With 85% deals now flirting with the 4% line, this is an unexpected acceleration in competition that could bring real relief to borrowers who’ve been waiting on the side-lines.

"Those ready to act now could lock in genuinely improved value before the Budget dust settles because if market confidence wobbles afterwards, today’s cuts could quickly vanish.”