Barclays offers ‘get out of tracker deal’ service

As the innovator of lifetime trackers, accounting for 63 per cent of all Woolwich mortgage deals taken out since we launched in 2006, Barclays today is the first provider to extend the popular ‘Switch & Fix ‘ (or ‘drop lock') feature to all existing Woolwich mortgage customers who have taken out tracker deals.

Switch & Fix allows all existing and new customers on a Woolwich tracker mortgage to switch to any current Woolwich fixed rate mortgage deal with no early repayment charge. It is valued by customers who want to benefit from low tracker rates now but with the ability to switch to a fixed rate mortgage if they expect rates rise in future, offering the security of fixing their payments.

Switch & Fix was introduced for new tracker customers in July 2010 but now extends to all tracker customers. Customers are free to switch to any product in the prevailing range of fixed rates including, for qualifying current account customers, Barclays loyalty mortgages.

Andy Gray, head of mortgages for Barclays, said "This is the right time to extend the Switch & Fix service to all our customers because it's still uncertain when and how quickly interest rates will go up. It underlines our strategy of offering value to our existing customers and making it easy and transparent for them to switch onto a fixed rate at the time they decide it is most appropriate for them. We know base rate is low now, so many people want to make the most of that with a tracker mortgage, but if rates go up at some point, that's when a fixed rate with set repayments will be valued.

"Since introducing Switch & Fix in the summer, we have seen a third more customers opt for trackers as this gives them a sense of security in a time of interest rate uncertainty."

For a customer who took out a tracker deal at base +2.29 per cent in October 2009 for a £150,000 mortgage and wants to switch across to a fixed rate, from today they would save £1,500 pounds by using Switch & Fix as they no longer have to pay an early repayment charge. All customers switching their mortgage to Barclays from another provider can benefit as Barclays pays the valuation and legal fees.

This follows on from Barclays hitting a milestone last week with mortgage lending reaching £100bn, which has been achieved by evolving and adapting the mortgage range to ensure borrowers' needs are met in the changing market place, providing the long term value that Barclays strives for.

Last week also saw a cut to lifetime tracker mortgages by up to 0.41 percentage points with key reductions across the 70 and 75 per cent LTV range. On the 70 per cent LTV the rate fell from base + 2.49 per cent to base + 2.08 per cent (a reduction of 0.41 percentage points) and the 75 per cent LTV reduced from base + 2.69 per cent to base +2.39 per cent . Equivalent loyalty tracker rates also reduced with a new headline rate of base +1.88 per cent.