Woolwich reduces rate on 2 year fixed rate mortgage deal

In the face of increasing SWAP rates which are pushing fixed rate mortgage deals higher Woolwich has chosen to simplify its range which has allowed it in some cases to actually reduce the rates on its fixed rate deals.

By standardising the loan to value at 95 per cent on all its 2, 3 and 5 year fixed rates Woolwich is able to reduce the rate on its two and five year fixed deals from 5.99 per cent to 5.79 per cent for 95 per cent loan to value, with a fee of £595. The fee free 2 year fixed rate has seen the rate on 95 per cent loan to value drop from 6.19 per cent to 5.99 per cent. This has the effect of making all these deals much more attractive to first time buyers.

Andy Gray, head of mortgages for Woolwich, said: “There is usually an up lift in mover activity at this time of the year, and we are targeting those having smaller deposits, most often first time buyers. At the 95 per cent loan to value level we have effectively reduced the rate from 5.99 per cent to 5.79 per cent for both the 2 and 5 year so for the average loan that’s a reduction in interest payable of £1,200 over 5 years. This is good news for first time buyers in an uncertain market.”

Woolwich, unlike its main competitors such as Halifax, Abbey and Nat West do not charge a higher lending charge above 90 per cent LTV. This will save the average customer £2,659 against the Halifax. At the end of the fixed rate period Woolwich products switch to a lifetime tracker at base +0.95 per cent, not the standard variable rate, that competitors move to.

Due to change in SWAP rates the ten year fixed rate mortgage has moved from 5.28 per cent to 5.59 per cent the rate with an application fee of £595. The loan to value is 80 per cent.