Mortgage rates have edged downwards in recent weeks but the best deals are not necessarily for everyone
Barclays has launched a five-year mortgage deal at a rate of 3.96 per cent – but only certain customers will be able to get it.
The rate is the lowest available on the UK-wide mortgage market, but it is only on offer for those buying an energy-efficient new-build home directly from the builder or developer.
The home must have an energy efficiency rating of at least 81 – a rating of B – according to its Energy Performance Certificate (EPC).
You will also have to have a 40 per cent deposit, and pay a £899 fee.
How do EPCs work?
A home’s EPC scores a property based on how energy efficient it is.
Properties with double glazing, good insulation and efficient boilers score higher.
Though most homes are in EPC band C or below, new properties tend to be more efficient, with around 85 per cent of new builds achieving a B or above.
How does the deal compare to other mortgages?
The five-year deal is the cheapest on the market, but there are others that are only marginally more expensive.
Lloyds Bank, for example, has a five-year option at 3.97 per cent with a £999 fee.
The cheapest deals, however, are all only available for those with large deposits of 40 per cent or more. If you have a smaller deposit, you will pay a higher rate.
Do experts think other lenders will follow?
Some experts believe the deal will mean more competition among lenders, and lower rates.
Aaron Strutt, of Trinity Financial, said: “It is great to see Barclays lowering its five-year fix as the move does highlight that there is a real competition between the lenders to attract customers. We may well see other lenders lowering their rates this week.”
However, he said it showed a trend of lenders offering cheap deals with a “catch”. Some banks, for example, will only offer their cheapest deals to those with high salaries, while others will charge high fees for those who want to get a low rate.
Sian McIntyre, managing director of mortgages and savings at Barclays, said: “With bills and costs rising, we know how challenging homebuyers are finding things right now.
“We’ve introduced several rate drops already this year across our mortgage range, making a real difference in affordability, and we’re delighted to announce more rate cuts.
“This includes bringing our Green Home mortgage even further below 4 per cent, making it the lowest five-year fixed rate available on the market.”
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