Barclays, Halifax, and NatWest cut mortgage rates as year-end approaches

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Barclays, Halifax, and NatWest cut mortgage rates as year-end approaches
Credit: © Reuters.

In a strategic move to increase business volume as the year draws to a close, major UK lenders Barclays (LON: BARC ), Halifax, and NatWest have announced significant cuts to their mortgage rates this week. This decision comes even as swap rates, which often influence mortgage pricing, have seen a slight uptick. The lenders' move to trim margins suggests a competitive push to attract borrowers who are looking to secure deals before the year concludes.

NatWest has particularly made headlines with its two-year fixed remortgage product now offered at a competitive rate of 4.87 percent, accompanied by fees ranging from £995 to £1,495, which vary based on the borrower's Green deal status. Additionally, NatWest is attracting purchasers with a five-year fixed mortgage at 5.64 percent designed for those with minimal deposits.

Barclays responded to the competitive environment with reductions of up to 0.57 percent on its remortgage products and has also revised down its purchase product rates for loans with an 85-95 percent loan-to-value (LTV) range. Similarly, Halifax has entered the fray with rate cuts on its mortgage deals by as much as 0.72 percent.

The aggressive rate reductions have been met with praise from industry experts. Contractor Mortgage Services highlighted the benefits for borrowers facing year-end deadlines, while EHF Mortgages noted that lenders are leveraging their reserves to attract customers ahead of the new year, despite facing squeezed profit margins. The Mortgage Co observed that the extent of the rate cuts raises questions about the level of previous lender margins, suggesting that the current reductions could be absorbed without significant impact from the minor changes in swap rates.

These moves by Barclays, Halifax, and NatWest signal a competitive end to the year in the UK mortgage market, with potential advantages for borrowers seeking to secure favorable mortgage terms.

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