Woolwich cuts fixed rate mortgages by up to 0.7%

18 February 2009 / by Rachel Mason
Woolwich has cut the rate of its fixed rate mortgage deals by up to 0.7 per cent.

Woolwich mortgages, the lending arm of Barclays, has cut the cost of most of its fixed rate mortgages offering customers competitive rates below four per cent.

Woolwich's two year fix and track mortgages have been cut by 0.5 per cent to 3.89 per cent, while the three year fixed rate has been cut by 0.7 per cent to 3.99 per cent.

At the end of the fixed rate period, all Woolwich fixed rate mortgages revert to Woolwich's tracker rate - 1.49 per cent above the base rate for the remaining life of the mortgage.

Woolwich mortgages has also launched a new range of four year fixed rate first time buyer mortgages, with LTVs up to 80 per cent.

For buyers with a deposit of 20 per cent, the rate is 4.99 per cent for four years, or for those with a 40 per cent deposit the rate is 3.99 per cent. Woolwich is still offering its market-leading one-year fix and track at 2.29 per cent.

"In these uncertain times, many of our customers are looking for some certainty and we have therefore taken the opportunity to reduce the rates on the bulk of our fixed rate range," said Woolwich mortgage spokesman Chris Keane.

"The one year fix and track remains the cheapest rate we have ever offered so adding to the range with the two and three year fixed rates - both below four per cent and both with a very attractive follow-on rate - gives customers a choice of even more keenly priced deals."

However, despite Woolwich and other mortgage lenders cutting their fixed rates in response to base rate cuts, Moneyfacts.co.uk has found that lenders are reluctant to move their standard variable rates (SVR) in line.

"Those already on or about to move on to their lender's SVR have been hardest hit of late, seeing just a third of the latest two cuts passed on," said Moneyfacts.co.uk analyst Michelle Slade.

"Many lenders seem to be actively trying to discourage borrowers using SVR as a product option, maintaining their SVR in line with average mortgage rates. Just one in four lenders have announced a cut in SVR this month and many of these passed on no cut last month."

"New tracker mortgage rates may have seen the biggest cuts passed on over the last two months, but the margin taken by the lenders continues to widen, today standing at three times base rate."

Ms Slade said that although rates are still falling, they are doing so at a much slower level than borrowers would have hoped.

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