Barclays has become the first major bank to reintroduce a mortgage deal with a rate below 4 per cent, following the surge in swap rates caused by the Iran war. The two-year fixed-rate product offers an interest rate of 3.96 per cent, but is only available to its Premier customers.
To qualify for the Premier tier, applicants must hold a current account with Barclays and either earn at least £75,000 annually or have a minimum of £100,000 in savings, investments or a combination of both with the bank. The deal carries a £999 product fee and is available for both new purchases and remortgages.
The return of sub-4 per cent rates comes after a volatile period in which many lenders pulled hundreds of products from the market due to the conflict. Swap rates, which underpin mortgage pricing, have since stabilised, allowing some lenders to lower rates again.
For remortgage customers, the best rate among Barclays' newly altered products is 4.8 per cent on a five-year fix, also with a £999 fee. Experts advise homeowners approaching renewal to seek tailored guidance, with 1.8 million people expected to need a new deal in 2026.
Paul Heywood, chief data officer at Equifax UK, warned that British households are paying 50 per cent more on mortgage repayments than four years ago, and further rate rises are possible in 2026. He noted that central bank policymakers face pressure from inflation and the ongoing Middle East conflict, which could disappoint borrowers hoping for a base rate cut.
