Credit Building > How do Barclays mortgages work?

How do Barclays mortgages work?

Wollit Team4 minute read · Updated 30th June 2024

Barclays is one of the UK's largest banks, lenders, and credit card providers.

As expected, it has a wide range of mortgage options. Whether you are a first-time buyer, an experienced property investor, or even someone new to the UK, Barclays probably has a mortgage solution.

For this guide, we’ll look only at the residential mortgages offered by Barclays – mortgages meant to help you buy your home, not a buy-to-let.

Does Barclays offer first-time buyer mortgages?

Yes. Barclays offers specialised mortgage products for first-time buyers:

The Family Springboard Mortgage. This innovative mortgage option allows family or friends to contribute 10% of the property price as security.
Low Deposit Mortgages: Barclays also provides mortgages for first-time buyers who may not have a 10% deposit saved.

Can I remortgage with Barclays?

Yes. If you already have a mortgage, Barclays also allows you to borrow against your property again. This can be useful if you need more money or want to consolidate your debts.

What kind of interest rates does Barclays charge for its mortgages?

Barclays offers various interest rate options for its mortgages, including fixed rates, tracker rates, and “part and part” rates.

The first option is the fixed-rate mortgage.

Here, you only pay a set interest rate for a specified period. This can give quite a bit of stability in monthly payments – you’ll always know what you need to pay. For example, Barclays offers a 2 2-year fixed mortgage with a fixed rate of 4.99%.

The second option is the tracker rate mortgage.

Here, the interest rate is linked to the Bank of England Base Rate. This means that if the Base Rate goes up or down, the interest rate on the mortgage will adjust accordingly. This can be great when interest rates are going down, but it can also make your monthly bill much higher when the Bank of England has to raise rates – for example, to fight inflation.

The third option is made of so-called “part and part” mortgages.

Here Barclays allows you to split your mortgage payment plan into two parts: a fixed rate and a tracker rate. This combines the predictability of a fixed rate with the flexibility of a tracker rate, which can be great if you need to borrow when interest rates are historically high (as they have been recently).

What are the usual terms for a Barclays mortgage?

Each Barclays mortgage will have terms tailored to each borrower based on their income and credit history.

That being said, Barclays does offer some general guidelines:

Maximum loan-to-value (LTV) is 95% for residential first-time buyers and home movers, 85% for remortgages, and 75% for buy-to-let.
The maximum mortgage term is 40 years for residential, and income multiples go up to 5.5x for qualified borrowers.
The maximum age at the mortgage end is usually 70 or retirement age.
You can apply for a Barclays mortgage online, phone, in-branch, or through a mortgage broker.
The application process usually takes 4-6 weeks on average for approval.

What are the eligibility criteria for a Barclays mortgage?

Besides the usual criteria (UK resident, 18 years old, and so on), Barclays has a few specific criteria for its mortgages:

You don’t need to be an existing Barclays customer to apply for a mortgage.
If you’re employed, you must have been with your current employer for at least 3 consecutive months before applying for the mortgage or have been in continuous employment for the last 18 months with no gaps.
If you’re self-employed, you must have been self-employed for at least 3 years and be able to provide at least 2 years of Self-Assessment tax returns.
You must also have a good credit history. According to Barclays, if you have defaults totalling more than £200 in the last three years, you are not eligible for its mortgages.

What if I’m new to the UK?

Barclays claims to be the only British bank to help you secure a mortgage “even before you land”. However, this scheme mainly aims at foreign investors who want to buy a buy-to-let property in the UK.

If you just moved to the UK and plan to live here, Barclays generally asks you to meet these eligibility requirements:

You must have lived in the UK for over 2 years.
If you have been in the UK for less than 2 years, the maximum LTV you can get is 90%, and you’ll also need additional checks and proof of income.

How do Barclays mortgages compare?

Barclays Mortgages stands out for several reasons compared to other mortgage providers in the UK:

It has competitive rates, especially if you have an excellent credit score.
Barclays also offers a wide range of LTV options. You might get a mortgage with a small deposit or better terms if you put down a larger deposit.
It offers a wide range of mortgages: fixed-rate, tracker, interest-only, offset, and more.
Barclays is also one of the most accommodating UK banks for people new to the UK.
Finally, if your financial situation improves, Barclays also accepts overpayments of up to 10% of your mortgage balance annually without any early repayment charges.

This isn’t to say that Barclays is a perfect mortgage lender. On Trustpilot, one of the largest customer review websites in the world, over 10,000 customers have given Barclays a rating of only 1.4 out of 5, one of the lowest we’ve seen.

When filtering only the reviews that mention their mortgages, the majority are negative, complaining about things like:

Getting turned down even with perfect credit scores.
Lower valuations than what the customers received from independent surveyors.
And especially having to deal with poor and unresponsive customer service.

However, the fact that Barclays is still one of the most popular lenders despite such low reviews is perhaps another validation of how competitive its mortgages are.

What is the minimum credit score needed for a Barclays mortgage?

Most top credit rating agencies have five categories for credit scores: excellent, good, fair, poor and very poor. The higher your credit score, the better your chances of getting the mortgage you need.

The main thing to keep în mind is that Barclays uses decision-in-principles, allowing you to apply without affecting your credit file. This is because a decision-în-principle only needs a soft check, not a full “hard” check.

However, you can have a decision in principle in your hand and still see your final mortgage application fail. To get fully approved, you’ll need to improve your credit history.

One of the best tools for this is Wollit. Wollit is a credit-building app that reports a fixed-fee monthly subscription as a loan repayment to credit reference agencies.

This helps you build your credit history by showing that you can pay back debt on time and in full, which is one of the main factors in your credit score.

And while you’re still renting and waiting for your credit history to become good enough for Barclays mortgage, Wollit can also report your monthly rent payment to Experian. This adds another line in your credit report that can give Barclays some reassurance that you’re a responsible person who pays their bills on time.