Barclays ‘blows the doors off’ with a 5-year fix at 4.39%

Thursday morning saw the latest salvo in the ongoing rate war as Barclays, TSB and Accord all announced rate cuts.

The headline grabbers, brokers said, were with Barclays, which revealed a 5-year fixed rate purchase mortgage up to 60% LTV at 4.39% with a £899 product fee, and a sub-5% 5-year fixed rate up to 90% LTV at 4.95%, with a £999 product fee.

Meanwhile, TSB announced rate cuts of up to 0.45% while Accord announced cuts of up to 0.3%.

Brokers were unanimous in their praise of the rate cuts. Stephen Perkins, managing director at Norwich-based broker, Yellow Brick Mortgages, said: “Barclays have blown the doors off with these rates and have sent a loud and clear message to other lenders.

“These rate reductions are showing real intent and the highlight is the sub-5% rates at 90% loan-to-value, which shows the rate reductions are starting to filter through to those with lower deposits. That’s what’s needed to reignite the market.”

Justin Moy, managing director at Chelmsford-based broker, EHF Mortgages, was equally enthused: “More Christmas cheer from mortgage lenders, all looking to start 2024 on the front foot. It’s interesting that the headline deals are still for purchases rather than remortgage cases, in an attempt to keep the housing market moving. Barclays are also pricing close to their best rates seen earlier in the year.

“The message about the base rate being ‘higher for longer’ might end up being the joke in a Christmas Cracker if these fixed rates cuts keep going.”

Meanwhile, Riz Malik, founder at Southend-on-Sea-based broker, R3 Mortgages, said lenders are putting margins second in a bid to win business: “No one wants to be left behind in a final push for business for 2023. Considering how much some of these rates have dropped, it might be the case that lenders are prioritising applications over margin.”

Ranald Mitchell, director at Norwich-based broker, Charwin Private Clients agreed with Malik: “The current downward trajectory in mortgage rates is intensifying as competition heats up between lenders. For many coming to the end of current deals in 2024, they can feel they have dodged a bullet, with the inevitable payment shock softening as the weeks go by.

“Lender focus on higher loan-to-value products will eventually kick-start the first-time buyer and home mover corners of the market, and some much-needed improved pricing on buy-to-let could also reinvigorate that sector. This pricing war is going to continue and, dare I say it, 2024 could just be shaping up nicely for the property market.

Gareth Davies, director at Southampton-based broker, South Coast Mortgage Services, was equally upbeat: “Who doesn’t love yet another rate reduction? The panic that overwhelmed the industry in the summer has now officially subsided. It may be brutally cold outside today but the mortgage thaw continues.”