Barclays launches Help to Buy mortgages
Barclays is the latest lender to launch deals for the mortgage guarantee side of the Help to Buy scheme.
Barclays has unveiled two new Help to Buy mortgages.
There is a three-year fix which comes with a rate of 5.35% and a five-year fix that is priced at 5.49%. Both are available to borrowers with deposits of 5%-10% and come with no upfront fees.
The mortgages are now available for borrowing between £50,000 and £570,000.
How Help to Buy works
Help to Buy is actually made up of two different schemes that work under the same banner. These are known as the Help to Buy: equity loan scheme and the Help to Buy: mortgage guarantee scheme.
The equity loan scheme allows borrowers with at least a 5% deposit to get a loan from the Government worth up to 20% of the value of a property. The remaining 75% is provided via a Help to Buy equity loan mortgage from a participating lender. This deal can be used to buy any new-build property worth up to £600,000 in England or £400,000 in Scotland.
Nationwide, Barclays, NatWest, Halifax and Santander all offer mortgages for this part of Help to Buy.
The mortgage guarantee scheme was launched in October and is available across the UK on any type of property, not just new-builds, up to a value of £600,000. Borrowers will also need a deposit of at least 5%, but in this case the Government acts as a ‘guarantor’ for the mortgage which can be up to 95% of the value of the property.
Aldermore, Bank of Scotland, Halifax, HSBC, NatWest, RBS, Santander, Virgin Money, Lloyds Bank and now Barclays are offering deals that are geared towards the mortgage guarantee scheme.
For more read Help to Buy mortgages explained.
How the Barclays mortgages compare
Here’s the full run-down of all the deals available through the mortgage guarantee side of Help to Buy.
|
Provider |
LTV |
Deal |
Initial interest rate |
Fee |
Extras |
|
90% |
Two-year fixed rate |
4.29% |
£0 |
£300 cashback |
|
|
90% |
Three-year fixed rate |
4.69% |
£0 |
£300 cashback, available for remortgage |
|
|
95% |
Two-year fixed rate |
4.79% |
£99 |
||
|
90% |
Five-year fixed rate |
4.89% |
£0 |
£300 cashback, available for remortgage |
|
|
Aldermore |
90% |
Two-year fixed rate |
4.98% |
£999 |
Available for remortgage |
|
95% |
Five-year fixed rate |
4.99% |
£99 |
||
|
95% |
Two-year fixed rate |
4.99% |
£0 |
Free valuation, £250 cashback on completion |
|
|
95% |
Two-year fixed rate |
4.99% |
£0 |
||
|
Santander |
95% |
Two-year tracker rate |
4.99% (base rate +4.49%) |
£0 |
Free valuation, £250 cashback on completion |
|
90%-95% |
Two-year fixed rate |
5.19% |
£995 |
£500 cashback for first time buyers |
|
|
Aldermore |
95% |
Two-year fixed rate |
5.28% |
£999 |
Available for remortgage |
|
95% |
Two-year fixed rate |
5.29% |
£0 |
£300 cashback, available for remortgage |
|
|
Barclays |
90%-95% |
Three-year fixed rate |
5.35% |
£0 |
|
|
Lloyds Bank |
95% |
Two-year fixed rate |
5.39% |
£995 |
|
|
95% |
Three-year fixed rate |
5.39% |
£0 |
£300 cashback, available for remortgage |
|
|
Santander |
95% |
Five-year fixed rate |
5.49% |
£0 |
Free valuation, £250 cashback on completion |
|
95% |
Five-year fixed rate |
5.49% |
£0 |
£300 cashback, available for remortgage |
|
|
Barclays |
90%-95% |
Five-year fixed rate |
5.49% |
£0 |
|
|
95% |
Five-year fixed rate |
5.49% |
£0 |
||
|
90%-95% |
Two-year fixed rate |
5.59% |
£0 |
£500 cashback for first time buyers |
|
|
Lloyds Bank |
95% |
Two-year fixed rate |
5.79% |
£0 |
The addition of Barclays range has rocked the boat when it comes to three-year fixes as its 5.35% rate in this category beats the only other contender Virgin Money which has a rate of 5.39%.
However, when it comes to five-year fixed rate deals Barclays has played it safe and matched the rate on offer from Virgin Money, Aldermore, Santander and NatWest/RBS. But Santander and Virgin Money have incentives like cashback to set them apart.
The leading rate overall for a Help to Buy mortgage guarantee loan in the five-year fixed rate sphere comes from HSBC with a rate of 4.99% and a fee of £99. However you will need to have a deposit of at least £10,000 to qualify. HSBC also offers the leading two-year fixed rate with a 4.79% deal that comes with the same caveat.
Santander is the only provider offering a tracker rate, while Virgin Money and Aldermore are the only providers to offer mortgage guarantee deals for those that want to remortgage.
Looking beyond Help to Buy
If you're looking to move onto or up the property ladder and have a small deposit it’s worth pointing out that there are a number of other lenders not participating in the Help to Buy Mortgage Guarantee Scheme, which are undercutting Government-backed offerings.
Chelsea Building Society for example has a leading rate of 4.69% on a two-year fixed 95% LTV deal, though it comes with a massive £1,675 fee. The next best rate comes from Market Harborough Building Society at 4.75% with a much smaller £95 fee, which still beats the leading Help to Buy alternative.
Elsewhere Furness Building Society is offering a leading five-year fixed rate of 4.75% on a 95% LTV that comes without a fee. However you will need to apply in branch to get this deal. After that the HSBC Help to Buy deal of 4.99% is the next best rate.
And for those with slightly larger deposits of 10% the rates are even better. The Post Office is offering a leading rate of 3.48% on a two-year fix or 4.29% on a five-year fix, which both come with a fee of £1,495.
See how much a mortgage could cost you and get help from an expert mortgage adviser
This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker, before acting on anything contained in this article.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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