Barclays this afternoon revealed a reduction in certain mortgage rates starting from Tuesday, August 15th, with notable decreases of 0.3% for product transfers and further advances for 2- and 5-year fixed rates up 85% loan-to-value ratio (see screengrab, below).
Considering that Barclays has now aligned with other leading lenders that adjusted their prices last week, free UK news agency, Newspage, asked brokers if this could trigger another wave of rate reductions, and if the rate war is now firmly on.
Ben Tadd, director at Luca Mortgages said, “The mini-rate war in the residential mortgage market appears to be continuing, with the main six lenders in the market having all now slashed their fixed rate offerings.
“This is now likely to force smaller lenders to follow suit and drop their prices to stay in touch with the competition.
“This week’s inflation data on Wednesday will be crucial to dictating lender pricing in the immediate future and, with further positive inflation numbers anticipated, the rate war is likely to continue at pace.”
Ranald Mitchell, director at Charwin Private Clients said, “Who saw this coming? It looks more and more like the bigger lenders are fighting for market position, a sure sign that they are well off their respective lending targets.
“The question is, with the likelihood of further base rate increases, is this a short-term window of opportunity for expiring fixed rates to soften the payment shock they have steaming towards them?”