Mortgage price war intensifies in  boost for borrowers as Barclays cuts rate by 0.5%

The mortgage price war has intensified in a boost for millions of borrowers who have seen the cost of home loans soar.

Barclays is today shaving as much as 0.5 percentage points off its fixed rate mortgages. It follows a host of cuts so far this year including last week when HSBC, Natwest, Metro Bank, TSB, Santander, Coventry and Skipton all lowered rates.

Figures from Moneyfacts show the average two-year fixed mortgage rate has fallen from 5.93 per cent at the start of the year to 5.59 per cent while typical five-year fixes are down from 5.54 per cent to 5.22 per cent.

Justin Moy, managing director at EHF Mortgages, said: ‘This is a barnstorming challenge from Barclays to the rest of the market. 

With increased appetite from those moving home and refinancing for property improvements, Barclays are currently in the middle of the ring swinging a right hook at the others.’

Ranald Mitchell, director at brokers Charwin Private Clients, said: ‘Barclays are committed to staying at the front end of the mortgage interest rate race.

‘Inevitably, a response will follow from their immediate competitors. The gloves are off.’