Barclays Price War

By Author: Filiberto Allison
Total Articles: 53
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Barclays is trying to repair its tarnished image by joining other lenders in a price war that is reducing mortgage rates.

The lender was heavily fined and its chairman resigned following news of the LIBOR scandal that involved the bank fixing rates.

The news is great news for those with mortgages, even though some of them might have been paying more as a direct result of the scandal.

Barclays, which was fined £290 million for its role in the fixing has reduced its rates by 0.3 per cent.

Nationwide Building Society cut rates on its fixed and tracker mortgage deals and Barclays followed.

The reductions followed the announcement of the Government's Funding for Lending scheme that will inject £80 billion straight into the mortgage and remortgage industry through existing lenders.

As predicted on remortgagenow.co a price was has broken out, but it is too early to tell whether the money will work to breathe life into the stagnant housing market.

Nationwide has lowered its rates by 0.4 per cent.

From yesterday, a five-year fixed-rate deal at Barclays is at a rate of 3.99 ...
... per cent - the lowest five-year mortgage deal offered by the bank in 2012.

Nationwide is offering fixed deals at 3.39 per cent for five years, 3.49 per cent for four years and 3.29 for three years.

The building society's cheapest mortgage is a two-year fixed rate available at 2.99 per cent.

Tracker deals across two and three-year ranges are being cut by 0.1 per cent.

Rachel Springall, from comparison website Moneyfacts, said: The new two-year fixed deal from Barclays is the lowest on the market at 70 per cent loan-to-value.

There is no fee to pay which will be good news to borrowers looking to keep down up-front costs.

Max Erskine from remortgagenow.co said: This could be great news for those with mortgages and those who want to get them.

As long as the money actually benefits mortgage-holders directly then this can go some way to helping the entire housing market.

It already seems that lenders are competing for custom by offering better deals, and this is a good sign.

Other things though need to be added to ensure that the money is just swallowed up and the market as a whole doesn't improve.

The NewBuy scheme was introduced to help first-time buyers and the construction industry, but this won't be enough.

Stamp duty holidays and even abolishing stamp duty for some properties could help prompt a longer term recovery.

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