Barclays extends remortgage offer

Barclays has extended its remortgage offer, which it launched in October, by increasing the maximum loan-to-value to 80 per cent and adding a new range of rates.

The new deal includes a lifetime tracker at 3.68 per cent - bank base rate plus 3.18 per cent - available to those with deposits of 20 per cent. The rate will be available from 6 January.

For those with bigger deposits, Barclays has a lifetime tracker of 2.88 per cent - bank base rate plus 2.38 per cent - available at 70 per cent loan-to-value, and 3.08 per cent - bank base rate plus 2.58 per cent - at 75 per cent loan-to-value. All of the deals come with no application fee, free legal work and valuation.

Barclays first launched its remortgage deal last October in a bid to expand its share of the mortgage market by tempting borrowers off their lenders’ standard variable rate - the rate customers revert to when their mortgage deal comes to an end.

Mortgage brokers have reported an increase in the number of borrowers looking to remortgage over the last few months as a result of improving rates. According to the latest Bank of England lending figures, published on Tuesday, the value of remortgages increased by £400m in November.

Brian Murphy of Mortgage Advice Bureau, the mortgage broker, said the increase in remortgage activity reflected the fact that there are currently some “exceptional rates” available at lower loan-to-values. “Borrowers are aware that the clock is ticking on interest rates and do not want to be caught napping,” he added.

Melanie Bien, director of mortgage broker Private Finance, says the new year is a good time for borrowers to look at their mortgage and review what rate they are on.

The start of the year has also seen a number of lenders launch January sales on their mortgage ranges.

HSBC is offering no fees on all of its tracker mortgages until 6 February, while First Direct is offering free legals and valuations for those remortgaging by 31 January.

Leeds Building Society is removing its completion fee of £800 and offering free standard valuations on its two-year discount mortgage range.

“While there are few January sales on the mortgage front this year, those that are available are extremely competitive, particularly the HSBC fee-free tracker priced from 2.29 per cent,” said Bien.

However, Bien said borrowers must always compare what is on offer with the rest of the market, factoring in rates plus fees to ensure they compare like-with-like. Borrowers should not be “seduced” by offers or headline rates, she added.

Borrowers should also be wary of opting for a discounted mortgage which is linked to the lenders’ SVR rather than the bank base rate, for example the Leeds Building Societies’ discounted mortgage deal. “There is no transparency with a discounted product, and lenders can raise their SVR quicker than base rate, so it will end up costing you more than a base-rate tracker,” Bien said.