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- Bank has made large cuts to rates across all deposit sizes
Barclays has cut its mortgage rates, and is now offering the cheapest deal for those buying a home with a 40 per cent deposit - if they fix for five years.
The lender has cut rates on five-year fixes across all deposit sizes, some by as much as 0.3 per cent.
This includes dropping its 40 per cent deposit rate from 3.98 per cent to 3.82 per cent, the lowest on the market, though borrowers will need to pay an £899 fee.
Barclays is also offering the lowest fee-free deal on a five-year fix for the same deposit size, however, at 4 per cent. It's also available to those with a 25 per cent deposit.
It comes as five mortgage lenders cut their rates at the beginning of last week: HSBC, Santander, TSB, NatWest and Principality Building Society.
These reductions have been influenced by figures showing rising unemployment and a decline in wage inflation, which have increased the chance that the Bank of England will cut interest rates when it next meets in December.
Some insiders also said lenders were keen to offer competitive deals to encourage borrowing at a time when the Budget has sent the property market into a slump.
Today, property portal Rightmove said a third of sellers had been forced to cut their asking price, as speculation over property tax rises has proved off-putting to buyers.
The latest suggestion is that Chancellor Rachel Reeves could put in place an extra council tax surcharge for homes in bands F, G and H.
Harps Garcha, director at London-based broker Brooklyns Financial, said told the news agency Newspage: 'This happened on the same day Rightmove reported a pre-Budget drop in house prices, which makes it look like lenders are gearing up for a bit of a price war to boost activity in the market.'
Nicholas Mendes, mortgage technical manager at broker John Charcol, added: 'Barclays' latest cut is another clear sign that lenders are leaning back into competition.
'The fact we're seeing reductions across multiple loan-to-value tiers shows this isn't a one-off tweak, but a deliberate push to capture momentum.'
Barclays has also dropped rates on five-year fixes for home purchases for those with smaller deposits of 15 per cent, 10 per cent and 5 per cent.
Its 4.03 per cent rate for those with a 15 per cent deposit is a best-buy for those seeking a fee-free product.
Higher rates with no fee can work out cheaper overall than a lower rate with a high fee, so it is worth comparing deals.
You can do this using This is Money's true cost mortgage calculator.
Skipton Building Society will also reduce some of its mortgage rates from tomorrow.
It is set to make cuts to both two and five-year fixes across all deposit sizes.