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Woolwich launches new mortgage product

Woolwich, the UK-based mortgage lending brand of Barclays, has announced that it is launching a new product to take advantage of any future drop in interest rates, which many commentators expect during 2008.

The new product will track at 0.26% for the first year below the base rate and for the following two years will track at 0.39% above the base rate. The product also benefits from a ‘droplock’ facility whereby, at any time, without early repayment charges, customers can switch to a Woolwich fixed- or capped-rate mortgage if they feel would be more appropriate.

Andy Gray, head of mortgages for Woolwich, said: We are moving towards a situation whereby the next movement in interest rates is likely to be down – but commentators are unsure when the rate change will come, some expecting early next year, others later.

With many borrowers coming off very low fixed rates, and tracker rates in the market generally moving higher, this product offers customers the opportunity to take advantage of an initial low tracker which is unlikely to increase in the short term. This will then switch to a very competitive lifetime tracker at a time when cuts in interest rates are expected, allowing customers to positively manage their mortgage outgoings over the next few years.