Barclays sweetens mortgage deals as interest rate decision takes focus
Barclays has become the latest bank to wade into the flurry of mortgage rate cuts as lenders turn their attention to next week’s interest rates decision.
The FTSE 100 giant cut rates across more than 20 mortgage products from Wednesday morning. It follows on from a slew of reductions from the likes of HSBC UK, Halifax, Santander and TSB in the last week as banks hoped for some reprieve after over a month of surging swap rates.
Nationwide-owned Virgin Money also said it would shave off 0.5 per cent from its five-year fixed rates on Wednesday, whilst HSBC kicked off a number of reductions to its residential and buy-to-let mortgage rates.
Katy Eatenton, mortgage specialist at Lifetime Wealth Management, said: “Lenders are now reducing rates as aggressively as they increased them.
“If more lenders follow suit, this may get the property market moving again after what has been an exceptionally turbulent March and April.””
Volatility in the market has been driven by the re-pricing of swap rates, which serve as a primary benchmark for pricing fixed-rate mortgages and reflect expectations for future interest rates over 2, 5, or 10-year terms.
Rates have begun to stabilise in the last few days, though still remain significantly higher than just months prior.
The average two-year fixed-rate homeowner mortgage was still stuck around 5.87 per cent this week, up from 4.83 per cent at the beginning of March. Meanwhile, the five-year fix reached the 5.76 per cent mark, compared to 4.95 per cent over a month ago, according to financial information platform Moneyfacts.
March’s mortgage mayhem
The mortgage market was driven into “mayhem” in March after the average deal hit a lifespan of just eight days, the lowest since records began in November 2011.
The frenzy in global economies drove a wrecking ball through the Bank of England’s “gradual” interest rate cutting cycle handing a blow to borrowers. It led to the overall product choice on the market shrinking by around 1,283 and falling below 7,000 for the first time since November 2025 – when markets were on edge as tax speculation ran rife ahead of the Autumn Budget.
David Hollingworth, associate director at L&C Mortgages, said whilst “growing number of lenders” were trimming rates, homeowners were now “turning their attention to the Bank of England’s decision next week, hoping for clues on the direction of travel for base rate.”
Fresh data from the Office for National Statistics (ONS) on Wednesday revealed inflation had surged to 3.3 per cent in March, up from three per cent the month prior. The increase was largely driven by surging fuel prices following the energy shock triggered by the conflict in the Middle East.
The spike introduced a new risk to hopes of a reduction in interest rates, which have sat at 3.75 per cent since the beginning of the year.
Skipton Building Society – which also took the axe to rates on Wednesday – said: “While falling rates offer encouraging signs for the market, a degree of caution remains important.
“Conditions continue to be volatile amid ongoing global conflicts and broader economic uncertainty, and it’s too early to say whether this marks a sustained downward trend.”