Woolwich change mortgage rates

Published: March 03, 2009

In what is seen as an attempt to pre-empt any reduction in the Bank of England base rate later this week, the Woolwich have today made sweeping changes to the mortgage rates on offer. The Woolwich have stated that they are offering even greater choice by introducing a new seven year Fixed Rate with effect from Wednesday 4th March. They also state that they will still be maintaining the rate on their one year Fix & Track product.

Other changes include the introduction of new Lifetime and Offset Capped Trackers which are available for mortgage loans of up to 60% of the value of the property, and have the benefit of an interest rate cap of 5.99% and 6.09% respectively. This may in some measure provide peace of mind for those borrowers who would like a tracker rate, but fear being tied into what could be a very expensive scheme if interest rates return to historic norms. Both schemes have a minimum loan of £100,000 and maximum loan of £500,000.

Whilst the introduction of the new rates is welcomed, it doesn't hide the fact that Woolwich have increased the interest rate on a large number of schemes, in some cases by up to 0.3%. If interest rates are cut again this month, Woolwich will no doubt argue that the majority of their customers will benefit. It is true that Woolwich have traditionally offered a very competitive range of mortgages, especially trackers, and the vast majority of their schemes revert to a variable rate of 1.49% above base rate. However, this ignores the fact that what the housing and mortgage industries need at the moment is some incentive to encourage buyers, especially first time buyers. Unfortunately, there is little in this announcement to suggest any such encouragement is coming anytime soon.