Several banks announced mortgage rate cuts on Thursday as lenders increasingly compete to entice customers after base interest has been consecutively held.
Barclays PLC (LSE:BARC) announced a fixed five-year deal at 4.39% for those looking at a 60% loan-to-value mortgage from Friday, down from 4.78% beforehand.
On 90% loan-to-value deals, Barclays will begin offering rates of 4.95%, compared to 5.20% previously.
Rates on two-year fixes will fall from 5.77% to 5.39% meanwhile, with borrowers looking for 85% equity able to access lower rates through deals with product fees.
“The market is moving at a fast pace and we are committed to remaining nimble with our pricing,” Barclays said.
Rivals Banco Santander (LSE:BNC), TSB Banking Group (LSE:TSB) and Accord also unveiled cuts on Thursday, with the former reducing rates by between 0.03 and 0.29 percentage points.
This leaves Santander’s remortgage rates at 5.09% for a two-year fix and 4.83% for a five-year fix, with each being offered alongside 60% loans and both including product fees.
Cuts from TSB and Accord are set to see mortgage rates fall by 0.45 and 0.30 percentage points, respectively.
Lenders have increasingly been locked in a price war in recent months, after the Bank of England opted to hold the base rate at 5.25% in its last two meetings.
Given increasing speculation that this means interest rates may now have peaked, lenders have looked to bring down rates on mortgages following rapid rises over the summer.
“As interest rates on fixed mortgages gradually fall, it’s positive to see lenders are conscious of the incentives on offer to borrowers,” Moneyfacts expert Rachel Springall commented.
However, she said, prospective buyers should be cautious of high upfront costs on some deals, given many lenders offer cheaper rates on deals which include product fees.