Woolwich cuts rate on offset mortgage to offer best overall deal from a high street lender

Following the announcement earlier this month that Woolwich would become the exclusive mortgage brand of Barclays, Woolwich launches (July 13) its first product change by cutting the borrowing rate on its lifetime tracker offset mortgage. The rate drops to below five per cent down to 4.98 per cent (tracking 0.48 per cent above base rate), eleven basis points below its previous offer. This is the best long term deal on offer from a high street lender.

Woolwich, which pioneered offset mortgages, launching the concept to market in June 2000, will offer the 4.98 per cent with free valuation and legal fees for re-mortgagers and with a loan to value of up to 80 per cent. There are no early redemption penalties and the arrangement fee is £595. A slightly higher rate of 5.09 per cent is available to those who need to borrow up to 95 per cent.

Andy Gray, head of mortgages for the Woolwich, said: "Woolwich built its reputation on innovation and six years after its initial launch we are pleased to be able to offer our lowest ever rate on our offset mortgage. Borrowers should not to be enticed by short term discounted Offset rates as all the rates in the market today revert to a higher rate than ours, even with the best headline rate of 3.24 per cent people can still save more than £4,500 over 10 years with the Woolwich.

"The take-up of Offset and tracker mortgages have doubled* in the last three months as SWAP rates continue to be pushed ever higher making fixed rate mortgages expensive by comparison. With interest rates still low savers are fairly restricted with few long term rates above five per cent. We think the market is ripe for the offset mortgage to come back into its own with the product likely to appeal to a wider audience than ever before."

The Woolwich offset also has the advantage, unlike some of its competitors, of being linked to both current and savings accounts. Money held in savings will get an effective interest rate of 6.2 per cent per cent for basic rate tax payers, and 8.3 per cent for higher rate payers, much better than all but the shortest term savings products on the market.

Following the launch of the market leading lifetime tracker mortgage in April 2006, Woolwich is today also widening the choice of tracker products with both fee and no fee options.
New lifetime tracker with a variable rate of 4.74 per cent (0.24% above base rate), arrangement fee of £595
Continuing to offer the best fee free lifetime tracker in the market (0.39% above base) with a rate of 4.89 per cent
Reduction of the minimum loan size to £50,000, which will widen the appeal of the products
The maximum loan to value has been increased to 80 per cent from 75 per cent.
No early redemption penalties and free valuation and legal fees for switchers.

Customers can find out more about all our new and existing mortgages by visiting their local Barclays or Woolwich branch, via the website: UK Mortgages or by phoning 0845 607 1111.

Contact Barclays:
Barclays
Emma Austin
0207 116 6145
Emma.austin@barclays.com