Barclays has announced a significant reduction to its mortgage rates, a move that will take effect for customers from Friday, 9 January 2026. The high street lender is joining rivals HSBC and Halifax in cutting the cost of home loans, marking a major shift for the UK property market at the start of the new year.
What Barclays is Changing
The bank is implementing cuts across its range of purchase home loans, remortgage deals, and its Reward products. Among the key changes is the introduction of a new five-year fixed rate at 4.08% for borrowers with a 20% deposit (80% Loan-to-Value), which carries no product fee. This rate will subsequently be reduced to 4%.
Barclays is also trimming rates on two of its two-year fixed deals, both of which come with an £899 product fee. The adjustments extend to the remortgage sector, where a five-year fix at 3.81% for those with 40% equity (60% LTV) and a £999 fee will be lowered to 3.76%.
Expert Analysis on Lender Competition
Aaron Strutt, Product and Communications Director at Trinity Financial, commented on the strategic move. "Barclays is the latest lender to kick off the year by lowering its mortgage rates with the aim of giving Santander and Nationwide a bit more competition to top the best buy tables," he said.
He noted that while the new rates are not absolute market leaders, they are very competitive. Strutt highlighted Barclays' offer of six times salary mortgages with two-year fixes priced just over 3.5% as particularly generous compared to recent years.
The expert pointed to industry forecasts to explain the heightened competition. "With UK Finance predicting 10,000 fewer property transactions in 2026 compared to 2025 and 1.8 million borrowers coming to the end of their fixed rates, competition between the lenders to issue more mortgages is likely to be even stronger this year," Strutt added, anticipating further criteria easing and potentially cheaper rates.
A Wider Market Trend
Barclays' decision follows a similar initiative from HSBC, which began reducing its rates on Monday. Halifax is also confirmed to be joining this wave of cuts with significant changes for its customers from the same Friday.
Currently, the most competitive deal on the market is held by Santander, which offers a two-year fixed rate at 3.55% with a £749 fee for borrowers at 60% Loan-to-Value. The actions by Barclays, HSBC, and Halifax signal a concerted push by major banks to attract homeowners and buyers in a cooling transaction market, potentially offering relief to millions facing the end of their current fixed-term deals.
