“The January mortgage fire sale is firmly underway” as major lenders Barclays and Santander announce rate reductions, according to EHF Mortgages managing director, Justin Moy.
Both major lenders announced rate cuts which will go live today (January 10).
Barclays
Specifically discussing Barclays' rate cuts, Moy described them as “significant” saying they were of interest to those with large and small deposits, as well as first-time buyers.
Barclays’s reductions included the bank’s two-year fixed £899 product fee at 60 per cent LTV being reduced from 4.62 per cent to 4.17 per cent and the two-year fixed £899 product fee at 75 per cent LTV being reduced from 4.70 per cent to 4.20 per cent.
This was greeted with positivity by brokers such as South Coast Mortgage Services director, Gareth Davies, who described it as a “very significant move” and “the best one we’ve seen in 2024 yet”.
Altura Mortgage Finance managing director, Rob Gill, added: “These cuts from Barclays are the latest salvo in the ongoing rate war as lenders scramble for new business.
“As long as the inflation outlook continues to improve, the trend of falling mortgage rates that started last year will continue to gather pace.”
Additionally, Switch Mortgage Finance director, Elliot Culley, described it as a “statement of real intent”.
However, he cautioned that Barclays “are flying close to the sun with these rates” and that this may represent a short-term reduction and, as a result “clients will have to act fast”.
Santander
Meanwhile, Santander’s rate cuts included reducing all standard residential fixed rates by between 0.17 per cent and 0.82 per cent.
As a result, its 60 per cent LTV five-year fixed rate with a £999 product fee for remortgages fell to 3.89 per cent and its 60 per cent LTV five year fixed rate with a £999 product fee for purchases fell to 3.94 per cent.
Montgomery Financial founder, Charles Breen, reacted positively: “This is less the usual minuscule repricing we see from one of the big six, but more like an earthquake.”
He added that his gut feeling is that “we are going to be seeing sub-4 per cent as the new norm”.
Additionally, Shaw Financial Services owner, Lewis Shaw, stated Santander’s announcement showed there was “some genuine competition between lenders now”.
Shaw predicted this competition to really improve “once a couple more of the big six join the party”.
Lawson Financial director, Michelle Lawson, added that the market should “expect more falls to come as stability returns” and that Santander’s announcement will “hopefully further stimulate competition in the mortgage market”.
tom.dunstan@ft.com
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