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News: Barclays heats up mortgage price war with lowest ever 10-year fixed rate

Wed, 07 Jan 15

 

The mortgage, announced today, will offer 2.99 per cent to borrowers for up to 60 per cent LTV - a discount from its previously offered 3.45 per cent. Indeed, this is the first time a 10-year mortgage has been available below 3 per cent, as Barclays heats up the price war currently taking place in the UK’s mortgage industry.

Last year, both Santander and TSB offered 10-year products at 3.44 per cent.

Santander’s offer, also up to 60% LTV, with a £995 fee, was accompanied by further reductions to selected three and five year fixes, with 2.54% (reduced by 0.15%), available up to 70% LTV for home-buyers and re-mortgagers with a £995 fee and 4.45% (reduced by 0.54%), available up to 90% LTV respectively.

TSB emphasised the flexibility of its mortgage, as well as its rate.

Dubbed "Fix and Flex", TSB offers the reassurance of a fixed rate over a longer term yet allows home-owners to remain flexible by enabling them to refinance or leave the mortgage after five years, without having to pay an early repayment charge.

Now, though, Barclays has taken the competition one step further, within a couple of years of similar rates being offered for five-year fixed rates.

Andy Gray, Managing Director of Mortgages for Barclays, said: "The New Year is traditionally a time to get your finances in order and plan for the year ahead. We are thrilled to be offering a UK first in the shape of our ten year 2.99 per cent fixed rate.

"Our New Year deals cater for a range of needs from home-owners reviewing their mortgage to those hoping to get on the property ladder during 2015 – we are confident our rates will be extremely appealing.

"A home-owner with a £150,000 mortgage balance with a market average SVR of 4.4 per cent could achieve savings of £4,595 over 2 years when choosing Barclays 2 year tracker at BBBR+0.89 per cent."

In addition, Barclays is introducing a new 60 per cent LTV 2 year tracker at Barclays Bank Base Rate plus 0.89 per cent with the lowest follow on rate on offer of BBBR plus 1.99 per cent. It has also significantly reduced the rates on some of its 2 year and 5 year fixed products, providing further support to customers looking for a better mortgage deal.

The announcement follows HSBC’s own promise of "unbeatable mortgage rates on the high street for new and existing customers" in the UK last week, pledging to match on-sale mortgage rates for two-year and five-year fixed products to ensure that its range of 70%, 80% and 90% LTV mortgages will be the lowest on the high street.

"Fierce competition between lenders has led to an all-out mortgage rate war, with two year fixed, two year tracker and three year fixed rates all at record lows," Brian Murphy, head of lending at Mortgage Advice Bureau, told TheMoveChannel.com last year. "This is resulting in tangible monthly savings for consumers, particularly compared to this time last year."

"There may be room for further discounts, but as we edge closer to an interest rate rise – currently expected in autumn 2015 – it’s likely that we will soon hit the bottom of the curve," he added. "Consumers playing the waiting game could therefore risk losing out on the most competitive deals."


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