"Barclays reintroducing a sub-4% mortgage at 80% LTV is significant" say brokers

BROKERS have welcomed the return of a sub-4% mortgage rate at 80% loan-to-value (LTV) from high street lender, Barclays, with one saying it is a “significant” moment for the mortgage market.

From tomorrow, Barclays will reduce its 2-year 80% LTV fixed rate for purchases with a product fee of £899 from 4.05% to 3.98%, along with further cuts at higher loan-to-values.

Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, said “Barclays reintroducing a sub-4% mortgage at 80% loan-to-value is significant".

He added: “Rates have been up and down all year, leaving borrowers frustrated by constant uncertainty. To see a mainstream lender dip below 4% again at this loan-to-value feels like a turning point and hopefully the start of some stability as we move towards a new normal in mortgage interest rates.”

Omer Mehmet, Managing Director at Welling-based Trinity Finance, agreed: "Barclays trimming rates is a welcome move, especially at higher loan-to-values where first-time buyers feel the pinch. A cut from 4.87% to 4.80% on a 95% deal may not sound seismic, but it shows lenders are sharpening their pencils as competition heats up.

“With every fraction of a percent mattering to stretched borrowers, the question now is whether other high-street banks will follow and spark a rate war.”

Babek Ismayil, CEO at homebuying platform OneDome, also welcomed the rate changes: “A sub-4% mortgage for borrowers at 80% LTV is encouraging and suggests lenders are doing their best to get the market firing after the summer lull. Even small cuts can generate important savings for borrowers at a time when finances are stretched and affordability is a struggle.”

Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, added: “Any cuts are welcome in what is an uncertain market at present, especially with the Budget looking ever closer and many would-be borrowers and homemovers sitting tight.

"The run-up to Christmas is a traditionally busy time for lenders and Barclays clearly want to get the market firing and hoover up some of the business.”

Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said Barclays have been at the front of the pack most of the year: “Barclays have been strong all year in terms of offering competitive products.

"There hasn't been much movement in the market recently with most lenders moving up rather than down, but Barclays have bucked this trend on a couple of occasions, showing a strong appetite to lend.”

Aaron Strutt, Product and Communications Director at London-based Trinity Financial commented: “Some of the best buy rates are coming back down again, which is welcome news given that more price hikes had been predicted. Nationwide and Halifax have already lowered their prices so Barclays is probably reacting to their changes.

"The upcoming Budget seems to have taken some of the heat out of the property market, so once again rates need to drop to liven things up.”