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Barclays turns up the heat with 1.99% 5-year fix and Family Springboard revamp

Barclays has upped the intensity of the rate war by launching a 1.99 per cent five-year fixed rate as well as revamping its Family Springboard mortgage.

The five-year fix is the joint-lowest in the market, alongside HSBC’s, and is available up to 60 per cent LTV for a £1,999 fee.

Chadney Bulgin mortgage partner Jonathan Clark says: “HSBC’s launch of the first sub 2 per cent five-year fixed rate caused a huge amount of interest in recent weeks, so it’s great to see another lender take the fight to them, especially one that intermediaries have access to, so full marks to Woolwich.”

From 6 May, first-time buyers taking out the lender’s Family Springboard mortgage will see a stepped reduction in the interest rate they pay over a three-year period.

The product, available to 95 per cent LTV, has a rate of 2.99 per cent in year one, 2.79 per cent in year two and 2.59 per cent in year three and has no fee. It allows ‘helpers’ to use their savings to help homebuyers secure a mortgage by depositing 10 per cent of the purchase price in a Helpful Start account. After three years the money is released, with interest, providing that the repayments have been kept up to date.

Coreco director Andrew Montlake says: “The Springboard product shows that innovation can exist in the current environment and these improvements confirm that there are lenders out there that want to lend and support the first-time buyer market.

“The appeal to family members is that they know their savings are helping their children without giving them up entirely. Having the rate ‘step down’ over the initial three-year term also gives further comfort that the mortgage will remain affordable and the savings returned, with interest, after three years.”

The lender has also cut a selection of rates by up to 0.15 per cent and one remortgage product by 80 basis points.

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