Woolwich launches ten year fix rate mortgage

Woolwich is launching a new long-term fixed rate mortgage at 5.29 per cent for 10 years to help boost the availability of competitive longer term mortgages at a time when there is increased volatility in the mortgage market on an almost daily basis.

Official figures from the Council of Mortgage Lenders suggest over 1.7 million borrowers will be coming off fixed rate mortgages in 2008. The vast majority of these are currently on rates at levels below base rate at 5.25 per cent, whereas most current mortgage products are above base rate, leaving a potential funding gap for millions of borrowers.

The new fixed rate which will have a fee of £995 and a loan to value of 60 per cent is aimed at this market where customers have built up equity over recent years.

Andy Gray, head of mortgages for the Woolwich, said: “The mortgage market is hugely uncertain at the moment and lenders are continually re-pricing products. However, the long term swap market has steadied at lower levels and we have been able to put together a long term product at an historically very competitive rate. With over 1.7 million coming off fixed rates this year, and several hundred thousand of these on rates longer than five years, we expect many consumers will want to fix for the long term to avoid short term volatility.

“We believe this will be the best priced long term product in the market place. With the Government looking to encourage longer term fixes, and with consumers looking to avoid short term volatility, we expect this product to be popular with borrowers. If nothing else it will certainly show whether consumers have an appetite to fix over the longer term, as the rate is hugely competitive.”

Product details for ten year fix rates:

Fixed for ten years at 5.29 per cent
Reverts to tracker at base + 0.95 per cent after initial fixed rate period
Arrangement fee £995 (can be added to the loan)
Loan to value of 60 per cent
Borrowers can overpay up to five per cent per annum without any charges during the fixed rate period
Six per cent early repayment charge during the fixed rate period
Customers switching from another lender can use Woolwich Switch & Save package with no valuation and legal costs
Available through intermediaries or direct from Barclays

Key features on all our residential mortgages:

Maximum flexibility: overpay, underpay & payment holidays
Available to all existing and new customers
No higher lending charge or early repayment charge beyond the fixed, capped or discounted period
Daily interest
Flexible features on fixed rate mortgage such as overpaying by up to 10 per cent per year.
Fully portable

Customers can find out more about all Woolwich new and existing mortgages by contacting their local Barclays branch, via the internet or by telephoning 0845 607 1111.