Elsewhere mortgage rates will be slashed by up to 1 per cent from tomorrow giving homeowners access to the cheapest mortgage deals Barclays has ever offered.
Barclays is committed to continuing to help first time buyers get on the property ladder; despite lending to first time buyers being at the highest point since 2008 it’s still way off the peaks of 2007 (308,400 in 2007 compared to 175,700 in 2012) with the biggest hurdle being the size of the deposit and the monthly mortgage payments. The new Family Springboard mortgage launching next week will help combat these issues and comes in two parts:
It provides first time buyers with a competitive three year fixed rate available with a five per cent deposit at 4.69 per cent, whilst their family opens a savings account linked to the mortgage into which they put 10 per cent of the purchase price. When the three year fixed rate ends* the savings are returned to the family.
In terms of the cheapest deals Barclays has ever offered, there will be a three year fixed rate deal for those with a 30 per cent deposit, which sees the largest cut of 1 per cent to 2.89 per cent. The two and five year fixed rates Barclays will be offering are priced at 2.39 per cent and 3.39 per cent, for those with a forty and thirty per cent deposit respectively.
Key reductions are also being made on the Great Escape remortgage package for those borrowers whose monthly payments were hit by competitors increasing their Standard Variable Rate last year. They can remortgage onto our cheapest ever two year fixed rate deal where the rate has been cut from 3.49 per cent to 2.99 per cent.
Andy Gray, managing director of mortgages for Barclays, said:
"This is a real boost for UK homebuyers with small or large deposits as we are giving them access to the cheapest ever deals we’ve been able to offer, brought about by the combination of the low base rate and funding for lending scheme. We’ve listened to our customers and need to continue to drive confidence in the housing market, the new family scheme and today’s slashed rates will encourage people to think about buying or moving home, which in turn will help the economy move forward. For existing homeowners this is extra good news as they can still look to reduce their monthly outgoings by switching to cheaper rates.”
For Family Springboard, a first-time buyer purchasing a home at £160,000 would need to save a 5 per cent deposit (£8,000) and require a mortgage of £152,000, the family will be required to put £16,000 into a Helpful Start savings account. The mortgage repayments would be £861.34 a month at 4.69 per cent for three years (based on a 25-year repayment mortgage).
