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Barclays has cut mortgage rates for home buyers with smaller deposits. The high street bank is now offering the only sub-4 per cent deal on the market for someone buying with a 20 per cent deposit. Barclays has lowered its two-year fixed rate for buyers with a 20 per cent deposit to 3.98 per cent, with a £899 fee attached.
On a £200,000 mortgage being repaid over 25 years that would mean paying £1,058 a month. The next best deal on the market is offered by Yorkshire Building Society – currently 4.05 per cent with a £995 fee. As for those buying with a 5 per cent deposit Barclays is now offering a 4.8 per cent five-year deal, with no fee attached.
On a £200,000 mortgage being repaid over 25 years that would cost £1,146 a month. There are slightly lower rates on offer elsewhere, though. Halifax and Lloyds Bank both offer a 95 per cent mortgage deal at 4.77 per cent, albeit with £1,000 fees attached. As for those with a 10 per cent deposit, it’s now possible to get a 4.28 per cent two-year deal with Barclays, with an £899 fee.
Babek Ismayil, chief executive of homebuying platform OneDome said: ‘A sub-4 per cent mortgage for borrowers at 80 per cent loan-to-value 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.’ Aaron Strutt, product and communications director at London-based Trinity Financial hopes the rate cuts will breathe some life back into the market.
‘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.’
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