by Mark Johnston
It seems that last month more than a million people have been hit with higher standard rates, lenders including the Halifax, the Co-operative, Royal Bank of Scotland (RBS) and Santander, to name but a few.
Home owners who are unhappy with their current variable rate and are worried about the cost and difficulties involved in changing their mortgage can feel like they have been ‘walled’ in with no chance of escape.
Barclays has recently announced the launch of their new mortgage rates which are fixed at varying levels and are priced as competitively as possible.
The lender offers a tracker deal with a 70% loan to value (LTV) at base rate plus 2.18% or a tracker deal with a 75% loan to value (LTV) at base rate plus 2.48%.
The lender also offers borrowers choosing one of these tracker deals a ‘switch and fix’ feature. This means that the borrower can benefit from the tracker rate while the base rate is very low, but also has the security of being able to switch to a fixed rate should they become concerned about future rises in interest rates. The switch does not incur any penalties.
The lenders other ‘great escape’ products are fixed rate deals with no legal, valuation or application fees and they will bank will even pay up to £300 towards existing lenders exit fees after completion.
The first fixed deal is until September 2014 at a rate of 3.74% with a 70% loan to value (LTV) ratio on a minimum £100,000 loan. The second 2 year fixed deal is at a rate of 3.99% with a 80% loan to value (LTV) ratio on a minimum £100,000 loan and the last deal is another 2 year fixed deal with a rate of 4.24%, it also has a 80% loan to value (LTV) ratio but it is for a minimum £50,000 to a maximum £100,000 loan.
The head of Barclay’s mortgages, Andy Gray, commented saying that “mortgage holders with a loan of £150,000 could save roughly £1,800 over a 2 year period by coming off a standard variable rate (SVR) of 4.79% and switching to one of our new great escape deals”.
These rates are by no means market leading but the fact that there are no fees does mean that Barclays are swimming alone in this pool at the moment. The lender has sent customers a clear message that it wants their mortgage business.
Michael Ossei, personal finance expert at uSwitch.com, said “these discounts coupled with no fees is an inspired move, as it means that it is now in a position to mop up other lenders disgruntled customers”.
Some mortgage experts do feel however, that as Barclays are only offering their great escape mortgages at 2 year fixes, it will mean that borrowers could find themselves looking for new deals as interest rates start to rise.
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