High avenue financial institution cuts mortgage charges – however the market common is creeping up
- The lowest five-year fix is now 4.1% and the lowest two-year fix is 4.22%
Another major high street bank has announced it is lowering mortgage rates – though the market average has crept up over the past month, data reveals.
Barclays will be reducing a number of its fixed rate deals by up to 0.14 percentage points from 10 December.
It follows on from NatWest cutting mortgage rates by up to 0.39 percentage points last week.
Barclays’ cheapest five-year fix will now be 4.11 per cent, though this rate is only available to those looking to buy a home with at least a 40 per cent deposit.
For homeowners needing to remortgage, Barclays is charging 4.12 per cent to those with at least 40 per cent equity built up in their home.
Other notable rate cuts include its 4.22 per cent five-year fix aimed at those purchasing a property with a 25 per cent deposit.
Incoming cuts: Barclays is cutting some of its lowest priced fixed-rate deals
Mortgage brokers welcomed the news as another step in the ‘right direction’ for borrowers.
Justin Moy, managing director at broker EHF Mortgages told the news agency, Newspage: ‘Though not gargantuan, these are important and symbolic rate cuts by Barclays.
‘After the Budget blip, rates are starting to move in the right direction again.
‘Lenders look to be getting ready to react to the stamp duty timebomb that will fuel business during the first quarter of 2025, and competitive rates will put them in pole position rather than leave them stuck on the starting grid.’
From 1 April 2025, the thresholds at which people start paying stamp duty on house purchases will revert to the levels set before temporary changes were made in 2022.
Andrew Montlake, managing director at mortgage broker Coreco added: ‘It is a case of every little helps at present as borrowers look for any crumbs of comfort that mortgage rates are starting to settle once more.’
Average fixed mortgage rates rise
While the cheapest mortgage rates are edging down, the average rate across the whole of the market has been increasing according to rates monitor Moneyfacts.
Over the past month, average mortgage rates on two- and five-year fixed rates rose by 0.13 and 0.19 percentage points, to 5.52 per cent and 5.28 per cent respectively.
This, it says, was the biggest monthly rise to the five-year fixed average rate since August 2023.
Rachel Springall, finance expert at Moneyfacts, said this was because lenders had re-priced their products in the face of volatility on the financial markets.
‘This month the average five-year fixed rate felt a notable monthly rise, and during 2024 the rate has not fallen as much as its two-year counterpart,’ she said.
‘This will come as disappointing news to those borrowers who prefer to lock into a deal for the longer-term.
‘There are estimated to be millions of borrowers who have not yet re-fixed their mortgage since rates started to rise in 2021, so seeking advice is wise.
‘Those who locked into a five-year fixed deal back in 2019 on average would have been charged 2.74 per cent, but that rate has almost doubled, now 5.28 per cent.
‘Borrowers will hope that mortgage rates will drop next year, and while there is speculation over multiple cuts to the Bank of England base rate, stubborn inflation can delay such decisions.’
