Barclays has announced it will lower its two-year fixed rate mortgages from 4.05 per cent to 3.98 per cent – with a product fee of £899.
“We’re cutting mortgage rates, with a particular focus on high LTV products in support of first-time buyers or those with a lower deposit,” a Barclays spokesperson said.
The lender has also reduced rates across a range of other residential and remortgage products.
The move, which comes into effect this week, has been hailed as a huge boost for borrowers.
Shaun Sturgess, director at Sturgess Mortgage Solutions in Swansea, said it “feels like a turning point and hopefully the start of some stability”, labelling the change “significant”.
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He said: “Rates have been up and down all year, leaving borrowers frustrated by constant uncertainty.
“To see a mainstream lender dip below four per cent again at this loan-to-value feels like a turning point and hopefully the start of some stability as we move towards a new normal in mortgage interest rates.”
Omer Mehmet, Managing Director at Welling-based Trinity Finance, said: “Barclays trimming rates is a welcome move, especially at higher loan-to-values where first-time buyers feel the pinch.
“A cut from 4.87 per cent to 4.80 per cent on a 95 per cent deal may not sound seismic, but it shows lenders are sharpening their pencils as competition heats up.
“With every fraction of a per cent mattering to stretched borrowers, the question now is whether other high-street banks will follow and spark a rate war.”
Experts say the upcoming budget appears to be driving the trend and helping to reduce the turbulence in the property market.
Last week, on the same day the Bank of England announced it would hold interest rates at four per cent, Nationwide said it would cut rates by up to 0.18 per cent, bringing its lowest priced deal to 3.80 per cent.