Mortgage lending companies in the UK continue to compete for customers by lowering the rates on their contractor mortgage products.
Barclays Bank recently cut the interest rates on 30% of its Woolwich brand of tracker mortgages and fixed rate deals. The high street bank has also made changes to its Great Escape package and increased the LTV to 85% so that people can take advantage of the deal with a lower deposit. An added bonus with the Great Escape mortgage is there are no application fees to pay.
Barclays’ head of mortgages, Andy Gray, said the bank was encouraging people to review their current mortgage now as it is not known for how much longer the Bank of England can retain the historically low base rate. He pointed out that the latest deals from Barclays enable borrowers to lock into a great rate and protect themselves from future increases.
Gray cited the example of a borrower with a standard variable rate 4.69% mortgage of £150,000 switching to the bank’s new two year fix. This would save the home owner about £5,400 he said, and this is a saving well worth having when household budgets are tight.
Barclays is not the only lender changing their mortgage products to serve their clients better. Significant cost savings can be obtained from many of the fixed rate mortgage deals currently available. In fact fixed rate mortgages are now at their lowest rate since 2007.
Recent data from the CML suggests that 65% of borrowers are now opting for a fix, compared to less than 25% choosing a tracker mortgage. 12 months ago, less than 50% of mortgage hunters went for a fixed rate deal.
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