Barclays cuts rates on some mortgages to below 4% amid US tariffs turmoil

Barclays has become the largest UK lender so far to cut its mortgage rates in apparent response to the financial turmoil sparked by the US trade tariffs, with some deals now priced at below 4%.

It is the first “big six” lender to enter the sub-4% fixed-rate market after similar announcements by some smaller lenders earlier this week, leaving brokers wondering whether this was a one-off move or the start of a new home loans price war.

Barclays said it was reducing some new rates by as much as 0.38 percentage points, with the changes taking effect on Friday.

Two- and five-year fixed deals currently priced at 4.11% and 4.12% and available to buyers with a large deposit will have their rate cut to 3.99%.

Fixed deals priced at below 4% have been available intermittently during the past few months, but two-year products under the threshold had not been generally available in recent weeks until Coventry Building Society launched one on Wednesday.

Stephen Perkins, the managing director at broker Yellow Brick Mortgages, said the move by Barclays was an encouraging development. “The big question, of course, is whether that pricing decision was instigated prior to the Trump tariff reversal or with full knowledge of it,” he said, referring to the US president’s decision on Wednesday to pause his “liberation day” tariffs for 90 days, except for China. “We now hold our breath to see if other major lenders will follow suit in cutting their rates.”

David Stirling, the director of Mint Mortgages & Protection, said it remained to be seen whether Barclays was “simply dipping their toes in”, but he added: “The general feeling is that other major lenders will follow suit this week.”

Pete Mugleston, a mortgage adviser and managing director of Online Mortgage Advisor, said the move could be the trigger that prompted other lenders to start cutting rates, but that given the unpredictability in the markets “it wouldn’t be a shock if other lenders held back until some semblance of stability hopefully returns in the next week or two”.Expectations of a Bank of England interest rate cut as soon as next month have dropped back a little after the latest developments in the US trade tariffs drama.

On Thursday morning, the City money markets were indicating there was a 78% chance of a rate cut on 8 May, from 4.5% to 4.25%, with a 22% possibility that the Bank’s policymakers would leave rates on hold.

Earlier this week, a rate cut was seen as certain, with a small possibility that the Bank may slash rates by half a percentage point to 4% to protect the UK economy.