For the first year, the product will track at 0.26 per cent below base rate (current pay rate of 5.49 per cent) and then at 0.39 per cent above base rate for the following two years.
Effective from 11 October, the product also benefits from a ‘droplock’ facility whereby at any time, without early repayment charges, customers can switch to a Woolwich fixed or capped rate mortgage if they feel this would be more appropriate.
Andy Gray, head of mortgages for Woolwich, said: “We are moving towards a situation whereby the next movement in interest rates is likely to be down – but commentators are unsure when the rate change will come, some expecting early next year, others later.
"With many borrowers coming off very low fixed rates, and tracker rates in the market generally moving higher, this product offers customers the opportunity to take advantage of an initial low tracker which is unlikely to increase in the short term. This will then switch to a very competitive lifetime tracker at a time when cuts in interest rates are expected, allowing customers to positively manage their mortgage outgoings over the next few years.
“Of course, if interest rates and markets don’t head in the direction that they are expected to do, customers can always drop into one of our fixed rates at any time. It gives borrowers the best of all worlds.”
Product details are as follows:
- One year discount of 0.26 per cent below base rate (current pay rate of 5.49 per cent).
- Year two and three reverts to tracker at base + 0.39 per cent
- Arrangement fee £995 (can be added to the loan)
- Loan to value of 80 per cent
- One per cent early repayment charge during the fixed rate period
- Borrowers can overpay up to 10 per cent per annum without any charges.
- Customers switching from another lender can use Woolwich Switch & Save package with no valuation and legal costs.
Also effective from 11 October, the popular Lifetime Tracker products will be streamlined from two into one product. The rate will be priced 0.27 per cent above base for LTVs of up to 80 per cent, a cut of one basis point on the previous pricing. There will no longer be a 60 per cent LTV product.
