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In a move that is likely to be welcomed by prospective property owners and investors, two major financial institutions, Barclays and NatWest, have announced significant reductions in mortgage rates. Barclays is set to introduce rate cuts on a range of mortgage products from tomorrow, while NatWest has already made its new rates available today.
Barclays is reducing the interest rate on its two-year, fee-free fixed-rate mortgage with a high loan-to-value (LTV) ratio of 90%, from above six per cent to below that threshold. This change aims to make home buying more affordable for those with smaller deposits. The bank is also reducing rates on its green mortgage initiative, which offers financial incentives for the purchase of energy-efficient homes, aligning with broader environmental goals.
For customers who need a high LTV of 95%, Barclays has cut rates under its mortgage guarantee scheme, which will ease financial strain for new homeowners. Additionally, the bank is targeting the top end of the market by offering rate relief for properties valued between £2m and £5m. Existing Barclays customers are not left out as they will benefit from lower interest rates on loyalty programs ranging from one to five years.
Meanwhile, NatWest has also made strategic cuts to its mortgage rates, effective Tuesday. The changes include a decrease in two- and five-year purchase agreement rates of up to 26 basis points (bps) and a reduction in remortgage rates for similar terms of up to 40 bps. First-time buyers will see a rate reduction of up to 26 basis points. Notably, NatWest is offering considerable reductions on two-year buy-to-let (BTL) rates, with cuts reaching up to 55 basis points. The BTL rate cuts for startups on these terms are even steeper, ranging between 100 and 106 basis points, albeit with an increased product fee of £3,499. BTL remortgage rates have also been reduced by up to 85 basis points on two-year plans, along with a higher fee.
In addition to these changes from Barclays and NatWest, Principality Building Society is reviewing its lending terms, offering reduced rates on residential and investment properties, some of which also remove additional fees to save customers on upfront costs. These reviews by financial institutions reflect a competitive mortgage market and provide a variety of options for borrowers looking to purchase or remortgage properties in the current economic landscape.
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