Mortgage rates continue to drop

Barclays has cut the rates on a range of mortgages for first-time buyers and borrowers with small deposits.

The bank is reducing the interest rate on its 90 per cent loan-to-value fixed deals with two and five-year terms, to 3.99 per cent and 4.79 per cent respectively.

For borrowers with slightly larger deposits of 15 per cent, Barclays has launched a five-year fixed mortgage with a rate of 3.99 per cent.

The lender is also cutting the rate on its 80 per cent loan-to-value “further advance” lifetime tracker, by 0.50 percentage points and its large loan lifetime tracker by 0.76 percentage poitns, setting the rate for both at 3.99 per cent.

Andy Gray, managing director of mortgages at Barclays, said the 3.99 per cent rate, which is based on the bank rate plus 3.49 per cent, offers “much better value” for borrowers over the long term than the typical standard variable rate of 4.4 per cent.

“The addition of a new five-year fixed rate at 85 per cent, will give customers the option of longer term stability and protect them from future base rate rises,” he added.

In another move, Virgin Money has reduced the rates across a range of residential and buy-to-let mortgages.

The lender has improved the terms on its two and five-year fixed-rate buy-to- let mortgages by 0.80 and 0.50 percentage points respectively, and its two-year buy-to-let tracker by 0.40 percentage points.

Two-year residential mortgage trackers have been cut by 0.10 percentage points on 70 per cent loan-to-value deals and “Freedom to Fix” trackers, which allow borrowers to convert to a fixed rate during the life of the tracker without charge.

The latest reductions follow similar moves by other lenders, including Yorkshire Building Society, in recent weeks.

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