The fix and track mortgage will initially offer a one-year fixed rate at 5.39 per cent; below the current base rate of 5.5 per cent. After the first year the rate will revert to a lifetime tracker at 0.39 per cent above base. Woolwich believes it will help borrowers beat the uncertainty of the current interest rate cycle.
The product will also offer a ‘drop and lock’ facility whereby customers will be able to switch into another Woolwich fixed or capped rate after the first year without incurring an early repayment charge.
Andy Gray, head of mortgages for the Woolwich, said: “Interest rates have been heading up over the last year and most forecasters in the short term expect at least one more rise of 0.25 per cent in base rates, and some expect two, before stabilising or falling back in 2008. The strength of this product is that the one-year fix will clip the wings of any further interest rate rise this year whilst allowing borrowers to take full advantage of any fall in interest rates next year with a very competitively priced lifetime tracker.”
“Of course, the drop and lock facility, means that if interest rates don’t fall as forecast, customers will have the extra security of being able to fix on another product to ensure they know their future payments.”
Product details on the ‘Fix and Track’:
- One-year fixed at 5.39 per cent reverts to lifetime tracker (base +0.39 per cent)
- Arrangement fee of £595
- Drop and lock facility which kicks in after the first year
- Mortgage fully portable
- Rate available for mortgages up to 80 per cent of the purchase price/valuation
- Early repayment charge of 1 per cent on the amount repaid within first three years. This is not payable if the drop lock facility is utilised
- For customers switching from another lender we will cover legal and survey fees under our Switch & Save option
