Barclays to launch fee-free two-year fix at 1.85%

Barclays is set to launch a fee-free two-year fixed rate at 1.85 per cent.

The product will be available up to 60 per cent LTV and on loans between £5,000 and £1m.

Tomorrow, the lender will also reduced selected 70 and 75 per cent LTV five-year fixed rates. A 70 per cent LTV deal will be cut by 10 basis points to 2.59 per cent while a 75 per cent LTV deal will be cut 14 basis points to 2.69 per cent. Both products will have £999 fees and will be available on loans to £1m.

Barclays managing director of mortgages Andy Gray says: “We are giving homebuyers one of the best fee-free mortgages on the high street, the security of fixing their rate at a competitive 1.85 per cent and zero application fees.

“Our extremely competitive two- and five-year deals are significantly lower than the average market SVR rate of 4.4 per cent and will have strong appeal to those homeowners who have between 35-40 per cent equity in their property and are currently sitting on their lenders SVR to fix their monthly mortgage payments.”

Barclays is set to launch a three-year stepped fixed rate that reduces in rate over the lock-in period.

Borrowers will pay 3.09 per cent in the first year, followed by 2.99 per cent and 2.89 per cent in years two and three respectively. It will be available to 85 per cent LTV, will have a £999 fee and will be available on loans to £1m.

Gray adds: “Over the three-year term, the average rate of 2.99 per cent will help customers to save £268 (based on a £150,000 mortgage balance over a 25-year term) compared to an initial fixed term rate of 3.09 per cent.”