Barclays increases mortgage rates by up to 0.6% as lenders rush to hike home loan costs

  • Barclays is the seventh major high street lender to increase rates this week 

By ED MAGNUS

Updated:

Mortgage borrowers look set to no longer be able to bag a home loan deal below 4 per cent as lenders continue to hike rates at pace. 

This evening, Barclays became the latest bank to announce it is upping mortgage rates.

The bank is upping rates by between 0.3 and 0.6 percentage points, according to Nicholas Mendes, mortgage technical manager at broker John Charcol.

Going up: One mortgage broker says this is effectively the end of sub-4 per cent deals for now

Going up: One mortgage broker says this is effectively the end of sub-4 per cent deals for now

Barclays is currently offering a 3.99 per cent two-year fix to home buyers purchasing with at least a 40 per cent deposit. This is likely to be much higher tomorrow.

Its 3.96 per cent five-year fix is also likely to disappear, a deal aimed at those buying with the biggest deposits.

Barclays is the seventh major mortgage lender this week to announce rate hikes. 

It follows similar moves by NatWest, Santander, TSB, HSBC, Virgin Money and Nationwide Building Society.

'Barclays has announced rate increases across its mortgage products, following similar moves by major lenders like HSBC, Santander, and Nationwide earlier this week,' said Nicholas Mendes of John Charcol.

'The updated rates, which apply to both fixed and variable mortgage offerings, show hikes across different loan-to-value bands and product types.

'These adjustments reflect the broader trend of rising costs in the lending market, influenced by ongoing economic pressures and changes in the interest rate environment. 

'Barclays' revisions include notable increases in rates for its two-year and five-year fixed products across various loan-to-value categories.

'This essentially marks the end of sub 4 per cent rates from the mainstream lenders, for the time being.'

How to find a new mortgage

Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.

Quick mortgage finder links with This is Money's partner L&C

> Mortgage rates calculator

> Find the right mortgage for you 

What if I need to remortgage? 

Borrowers should compare rates, speak to a mortgage broker and be prepared to act.

Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.

Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.

Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. 

What if I am buying a home? 

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. 

Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.

How to compare mortgage costs 

The best way to compare mortgage costs and find the right deal for you is to speak to a broker.

This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.

Interested in seeing today’s best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

If you’re ready to find your next mortgage, why not use L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.

> Find your best mortgage deal with This is Money and L&C

Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you. 

Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage 

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