Barclays helps customers with lower interest rates

On the back of its Barclaycard announcement yesterday, which gives additional support to UK credit card customers, Barclays today announced cuts in its mortgage and small business interest rates, making repayments more affordable for borrowing customers in the UK.

The reductions, which are tied to today's Bank of England base rate reduction of 0.5 percentage points, augment a series of Barclays initiatives designed to enhance its practical support of homeowners and small and medium-sized enterprises (SMEs).

Specifics

Beginning March 1st, all customers on Woolwich tracker mortgages will benefit as the Barclays Bank Base Rate reduces by 0.5 percentage point to 1 per cent, in line with the Bank of England rate.

New tracker customers will see the revised rates from tomorrow, Friday, February 6th.

The majority of Barclays mortgages, all offered under the Woolwich name, track the base rate for the entire life of the loan, and proportionately more Barclays mortgage customers have seen the full benefit of the base rate reduction than those of any other mortgage lender.

All fixed rate Woolwich mortgages revert to a lifetime tracker at the end of the specified fixed term.

The Woolwich Standard Variable Rate (SVR) will be cut by 0.5 percentage points to 4.99 per cent with effect from March 1st. Less than three per cent of Woolwich mortgages are on SVR and no new SVR-related mortgages have been made since 2006.

All Barclays Local Business overdraft rates and the majority of Local Business loans have moved in line with today's base rate reduction.

Mark Parsons, Managing Director of Current Accounts, Savings and Mortgages at Barclays, said: "Today's move to reduce mortgage payments is good news for millions of customers and augments the ongoing measures Barclays is taking to help customers with their finances."

Other actions to support homeowners

Barclays, through the Woolwich mortgage brand, last week launched the lowest mortgage currently on the market for either tracker or fixed rate mortgages. The mortgage begins with a one year fixed rate at 2.29 per cent, and then switches to a competitive tracker at 2.29 per cent above base rate for the remaining life of the mortgage.

With only one per cent of all repossessions in the market, Barclays is committed to keeping customers in their homes and has a strong record on arrears and repossessions.

In conjunction with the Council of Mortgage Lenders, Barclays is fully committed to a pre-action protocol on managing customers in financial difficulty and the arrears/repossessions process.

Other actions to support SMEs

Barclays currently has approximately £15 billion in lending balances in place with SME customers in the UK market, up six per cent year-on-year.

We're committed to making at least a further £1.5 billion available to SMEs in 2009, bringing our total commitment to around £16.5 billion by the end of 2009.

Barclays is making available its CreditFocus service free of charge to all UK small businesses in 2009, whether or not they are a Barclays customer.

Barclays is the leading bank on the recent Government initiative on European Investment Bank (EIB) support. We have negotiated with the EIB a relaxation in the customer qualifying criteria for an EIB-backed loan and have committed to passing on the financial benefit of this in full to the borrower. Barclays was the first in the industry to draw a new EIB loan.
Barclaycard

On 4th February, Barclaycard announced several initiatives to give additional support to its UK customers, including a four-month price freeze on purchase interest rates for existing UK personal customers as a result of changes to their risk profile. Other measures include a reduction of between 2.5 and 5 percent on the purchase interest rate for at least three million customers with a ‘low risk' profile.