Barclays has become the first major UK bank to reintroduce a mortgage deal with an interest rate below 4 per cent, following a period of volatility in swap rates triggered by the Iran conflict. The two-year fixed-rate deal offers a rate of 3.96 per cent, but it is exclusively available to the bank's Premier customers.
To qualify for Premier status, 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 applies to new purchases and remortgages with a 75 per cent loan-to-value ratio and carries a £999 product fee.
The return of sub-4 per cent rates comes after a turbulent period in the mortgage market, where many lenders withdrew products and rates surged following the conflict. Swap rates, which underpin mortgage pricing, have since stabilised, allowing some lenders to lower rates. However, Barclays has also raised rates on some other products, reflecting ongoing uncertainty.
For remortgage customers, the best rate from Barclays' newly adjusted products is 4.8 per cent on a five-year fix, also with a £999 fee. Experts advise homeowners approaching renewal to seek tailored advice, with 1.8 million people expected to need a new deal in 2026. Paul Heywood, chief data officer at Equifax UK, noted that average monthly repayments for new mortgages remain 50 per cent higher than in January 2022, with further rate rises possible due to inflation and geopolitical tensions.
