Barclays still offering 3.99% two-year tracker and 4.75% two-year fix
Tags: Large mortgage loans, Remortgages, Residential mortgages
Quick Summary
Barclays is still offering a 3.99% two-year tracker mortgage despite recent increases to fixed mortgage rates. Its competitively priced two-year fixed rate has risen to 4.75%, creating a 0.76 percentage point gap between the two deals.
The Barclays Premier tracker is available to eligible borrowers with at least 40% deposit or equity, has a £999 product fee and a maximum loan of £2 million. It currently tracks the 3.75% Bank of England base rate, so payments can rise or fall if Bank Rate changes.
The 4.75% fixed rate offers greater payment certainty for borrowers who prefer to know exactly what they will pay. Barclays tracker customers can also use its Switch & Fix facility to move onto a fixed rate without paying an early repayment charge on the tracker. Trinity Financial can compare Barclays tracker and fixed mortgages with deals from other leading lenders.
It has been another difficult start to the week in the mortgage industry, with more of the big banks pushing up the cost of their fixed rates.
Barclays rates have gone up multiple times in recent weeks, but the bank is still offering its 3.99% two-year tracker mortgage, and a competitively priced two-year fixed rate has increased to 4.75%.
The difference between the two deals highlights how much more expensive fixed-rate mortgages have become following the recent rise in wholesale funding costs.
For eligible borrowers prepared to accept a variable rate, the 3.99% Barclays Premier two-year tracker therefore continues to stand out.
How does the Barclays 3.99% tracker mortgage work?
The Barclays Premier tracker is available to eligible borrowers with at least a 40% deposit or equity and has a £999 product fee. The maximum mortgage is £2 million.
It is available to qualifying Barclays Premier customers, subject to the bank's lending and Premier Banking criteria. The mortgage currently tracks the 3.75% Bank of England base rate, giving an initial payable rate of 3.99%.
Unlike a fixed-rate mortgage, the interest rate can change. If the Bank of England increases Bank Rate, mortgage payments are likely to rise. If Bank Rate falls, payments could potentially become cheaper.
3.99% tracker or 4.75% two-year fix?
There is now a significant 0.76 percentage point difference between the two headline rates. The tracker may appeal to borrowers who are comfortable with their monthly payments changing and who do not want to lock into today's higher fixed rates.
The 4.75% fixed rate provides more certainty because the mortgage rate and monthly payments are fixed for two years, regardless of what happens to Bank Rate during that period. Barclays also states that its tracker mortgage customers can use its Switch & Fix facility to move onto one of its fixed-rate mortgages without paying an early repayment charge on the tracker.
Aaron Strutt, Product Director at Trinity Financial, says:
“Barclays' 3.99% tracker looks increasingly competitive now that so many lenders have pushed up their fixed rates. There is quite a gap between the 3.99% tracker and the 4.75% two-year fix, particularly for borrowers taking larger mortgages. Trackers will not be suitable for everyone because payments can increase if the Bank of England raises the base rate. Some borrowers will still prefer to pay more for the certainty of a fixed rate.
“It is worth comparing the overall cost of both options rather than simply choosing the mortgage with the lowest headline rate.”
Should you take a tracker or fixed-rate mortgage?
Choosing between a tracker and fixed mortgage will depend on your circumstances, mortgage size and attitude towards potential interest-rate changes.
Trinity Financial's brokers can compare Barclays with other banks and building societies and calculate whether a tracker, two-year fix or longer-term fixed mortgage is likely to suit your circumstances.
Representative Example: A capital and interest mortgage of £400,000 payable over 30 years, initially on a 3.99% variable rate for two years and then on a standard variable rate of 5.74% for the remaining 28 years would require 24 payments of £1,910.53 followed by 336 monthly repayments of £2,312.91. The total amount repayable would be £823,221.48. This amount is illustrative and may vary, made up of the loan amount, plus interest (£423,591.37) and £899 (product fee), £80 (final repayment charge), £25 (completion fee). The overall cost for comparison is 5.6% APRC representative.
Representative Example: A capital and interest mortgage of £400,000 payable over 30 years, initially on a 4.75% fixed rate until 31/12/2028 and then on a standard variable rate of 5.74% for the remaining 28 years would require 26 payments of £2,089.47 followed by 334 monthly repayments of £2,321.91. The total amount repayable would be £830,075.16. This amount is illustrative and may vary, made up of the loan amount, plus interest (£430,490.32) and £899 (product fee), £80 (final repayment charge), £25 (completion fee). The overall cost for comparison is 5.7% APRC representative.
Speak to a Trinity Financial adviser today
The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.
Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar
The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.
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