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Substantial rate cuts from Barclays on fixed rate mortgages

Journalist: Justin Moy, Contributing Editor

ended 28. September 2023

Barclays has announced some significant cuts to its fixed rate range, in particular across its 2-year deals, with a headline 2-year fixed rate deal at 60% loan-to-value priced at 5.28%. Brokers said this looks to be the cheapest 2-year fixed they have seen for months.

According to Justin Moy, founder at Chelmsford-based mortgage broker, EHF Mortgages: “This is an interesting move by Barclays, concentrating on the shorter-term deals that are most popular with borrowers. Their headline 2-year fixed rate deal is 0.6% cheaper for a 60% loan-to-value deal, at 5.28%, with similar savings across the various LTV bands. This could be the optimum time to reserve a new deal for a while.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, added: “It's interesting to see Barclays with significant cuts to its 2-year fixed rates. This may tempt many customers who think that rates will have evened out in the next 24 months or so to take a shorter-term fix in the hope they can secure better deals once this period is over. However, it's a risky strategy that could backfire, so most should proceed cautiously.”

Charles Breen, director of Wellingborough-based mortgage broker, Montgomery Financial, said this was a shrewd move from Barclays: “Lenders are dropping their rates rapidly at the moment in an attempt to stimulate activity and boost their market share. We have all been waiting for a lender to break cover with their new rates and provide something to make advisers really sit up and take notice and this finally feels like it. This move from Barclays is a clear indication that they want to write business, and sends a direct message to other lenders. There is always competition between lenders who all have targets to meet, and with the recent lull in activity this will be their attempt to generate business. The majority of borrowers at the moment are leaning towards 2-year products as they believe that the landscape will be a lot more attractive in two years so this is a clever move by Barclays to capture a large portion of this market.”

Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, concluded: "Barclays are concentrating on the 2-year fixed market with big reductions across their current range for lower LTV remortgages. It's an interesting strategy and one which will likely appeal to borrowers who don't want to lock in for a longer period with forecasts expecting rates to level out in the next couple of years."

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6 responses from the Newspage community

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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
Barclays has truly impressed, particularly with its substantial reductions in fixed-rate terms over two years. We have seen a surge in client demand for a two-year fixed term, in contrast to longer commitments, which makes this move particularly astute. We hope this sets a trend, prompting other lenders to take a cue from Barclays' proactive approach.
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Ben Tadd
Director at Lucra Mortgages
This is the biggest cut to a 2-year fixed rate from a high street lender since the mini rate war began around 8 weeks ago. It is a real show of intent from Barclays that they are very much open for business and are hedging on their short-term fixed offerings. The other big leading lenders may now be forced to reduce their rates further in the coming days to ensure they can compete, to maintain their market share. Good news for mortgage borrowers who will be hoping lower fixed rates are here to stay.
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Editor
Justin Moy
Managing Director at EHF Mortgages
This is an interesting move by Barclays, concentrating on the shorter-term deals that are most popular with borrowers. Their headline 2-year fixed rate deal is 0.6% cheaper for a 60% loan-to-value deal, at 5.28%, with similar savings across the various LTV bands. This could be the optimum opportunity to reserve a new deal for a while.
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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
Can we set off the cannons and let the parade begin? Will we see the emergence of sub-5% two-year fixed rate deal become the norm before the year is out? It looks like Barclays is heading in that direction. Many borrowers would prefer a cheaper 2-year fixed rate than locking in on a 5-year deal, particularly if rates are stalling now, with downward trajectories that we have seen recently.
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Elliott Culley
Director at Switch Mortgage Finance
Barclays are concentrating on the 2-year fixed market with big reductions across their current range for lower LTV remortgages. It's an interesting strategy and one which will likely appeal to borrowers who don't want to lock in for a longer period with forecasts expecting rates to level out in the next couple of years.
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Charles Breen
Founder at C B
Lenders are dropping their rates rapidly at the moment in an attempt to stimulate activity and boost their market share. We have all been waiting for a lender to break cover with their new rates and provide something to make advisers really sit up and take notice and this finally feels like it. This move from Barclays is a clear indication that they want to write business, and sends a direct message to other lenders. There is always competition between lenders who all have targets to meet, and with the recent lull in activity this will be their attempt to generate business. The majority of borrowers at the moment are leaning towards 2-year products as they believe that the landscape will be a lot more attractive in two years so this is a clever move by Barclays to capture a large portion of this market.