The discount tracker mortgage has an offset facility and is being targeted at bankers, brokers, consultants and entrepreneurs on track to receive large bonuses this year. It is available to those looking to borrow over £500,000.
The mortgage offer starts as a 0.51 per cent discount off Bank of England Base Rate (BBR) and has an initial pay rate of 4.24 per cent. This is available until July 2007 when it reverts to BBR plus 0.49 per cent (5.24 per cent) for the life of the loan. The mortgage has a fee of £1,499, has no early repayment charges and includes drawdown and offset facilities.
Andy Gray, head of mortgages at Woolwich, said: “The key to the mortgage is that it offers full offset facilities which could be of great help to customers who want to get into the market now. Most people expecting a large bonus in January or February will already have a good idea if they are going to get one. The problem is it doesn’t get paid until the New Year and if they want to buy a property now they might be restricted by what they can borrow and by the choice of mortgage type.”
Commenting, Nick Gardner, director at Chase de Vere Mortgage Management, added: “I think it’s an excellent idea, and is targeting the groups that benefit most from such flexible loans – workers who receive big bonuses or fluctuating incomes, who need a flexible mortgage to compliment their unauthodox earning patterns.”
James Cotton, mortgage specialist at London & Country, said: “The product is very specifically targeted for the situation, but it’s designed well and has got all the features you would expect. It’s got a good initial rate and it’s quite interesting that the Woolwich is hinting towards a short-term mortgage, as the customer could take it for the short term and pay off a large chunk at the end of the initial rate.”
