In a move that will likely be welcomed by prospective homeowners and property investors, two major financial institutions, Barclays (LON:BARC) and NatWest (LON:NWG), have announced significant reductions in mortgage rates. Barclays is set to introduce rate cuts across a range of mortgage products starting tomorrow, while NatWest has already made its new rates available today.
Barclays is reducing the interest rate on its fee-free two-year fixed-rate mortgage with a high loan-to-value (LTV) of 90% from over six percent to below that threshold. This change aims to make home buying more affordable for those with smaller deposits. The bank is also lowering rates for its green mortgage initiative, which offers financial incentives for purchasing energy-efficient homes, aligning with broader environmental goals.
For customers needing a high LTV of 95%, Barclays has trimmed rates under its mortgage guarantee scheme, which will ease the financial strain for new homeowners. Additionally, the bank is catering to the upper end of the market by offering rate deductions 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 from Tuesday. The changes include a decrease in two- and five-year purchase deal rates by up to 26 basis points (bps) and a reduction in similar term remortgage rates by up to 40bps. First-time buyers will see rates cut by up to 26bps. Notably, NatWest is offering considerable reductions on buy-to-let (BTL) two-year purchase rates, with cuts reaching up to 55bps. New business BTL rate cuts on these terms are even more pronounced, ranging between 100-106bps, albeit with an increased product fee of £3,499. BTL remortgage rates have also been reduced by up to 85bps on two-year plans, accompanied by the higher fee.
In addition to these changes by Barclays and NatWest, Principality Building Society is revising its lending terms, offering reduced rates on residential and investment properties, some of which also eliminate additional fees to save customers on upfront costs. These revisions 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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