Mortgage rates continue their downward trajectory this week, with two more high street lenders announcing lower home loan deals.
Barclays is cutting a range of two-year and five-year fixed rates aimed at those buying and remortgaging.
Meanwhile, Santander is also launching a number of new sub 4 per cent rates after it announced it is lowering fixed rates by up to 0.18 percentage points.
Mortgage rates have been falling on almost a daily basis over the past few weeks.
Average two-year fixed mortgage rate fell month-on-month by the biggest margin in over six months, according to Moneyfacts.
It also said the average two-year fixed mortgage rate has fallen to its lowest point since the start of September 2022, before the infamous ‘mini-Budget’.
Barclays has announced further rate cuts today, including a five-year fix at 3.79%
‘The momentum of rate cutting was rife throughout April, with lenders rushing to tweak their mortgage ranges, leading to a drop in the average shelf-life of a mortgage to 19 days, down from 21 a month prior,’ said Rachel Springall, finance expert at Moneyfacts.
‘Such vigorous activity led to notable cuts to the overall average two- and five-year fixed mortgage rates, seeing the biggest monthly fall to the two-year fixed rate in over six months.
‘There is more positive news for borrowers with smaller deposits, with the average two-year fixed mortgage at 90 per cent loan-to-value dropping to its lowest point since October 2022 and product choice overall at 90 per cent and 95 per cent loan-to-value remains at a 17-year high.
‘There will be millions of consumers coming off low fixed rate mortgages over the next year and they need both the support and appetite for new business from lenders to secure new deals.’
From tomorrow Barclays will be offering the lowest five-year fixed rate deal on the market for those buying with with a 40 per cent deposit.
The 3.79 per cent deal comes with a £899 fee. It means someone with a £200,000 mortgage being repaid over 25 years will pay £1,033 a month.
However, it’s worth point out that this is what Barclays refer to as a Green Home deal. This means it is only available for those buying homes that have an energy performance certificate of A or B.
For people buying the most energy efficient homes, there is plenty of good news however.
Barclays is now offering a 3.95 per cent deal for those buying with a 25 per cent deposit and fix for two-years. Only TSB is offering a lower rate at 3.94 per cent.
Households looking to remortgage may also benefit from Barclays changes.
Its lowest two-year fixed remortgage is falling to 3.88 per cent while its lowest five-year deal is falling to 3.89 per cent – these are for those with at least 40 per cent equity built up in their home.
‘Mortgage rates continue to fall as lenders look to keep up with the competition,’ said David Hollingworth, associate director at L&C Mortgages.
‘That’s bringing some more appealing rates on all fixed rates and two year rates are now very much on par with, and sometimes slightly below, five year rates.
‘However, it’s worth noting that the UK-US trade deal and a split in the vote to cut the Bank of England base rate edged swap rates up at the end of last week.
‘That could see momentum in cuts ease off and we’ll see how the money markets react to the improvement in US/China negotiations.’