Subscribe to The Money StopNews Feed

Browse > Home / News, News-Mortgages / Woolwich launched cheapest mortgage since first loan

Woolwich launched cheapest mortgage since first loan

March 13, 2009 by admin  
Filed under News, News-Mortgages

Leave a Comment

According to recent reports the Woolwich recently launched its cheapest mortgage deal since its first loan, which was made around one hundred and sixty years ago.

The Woolwich offered its first loan in 1847, and has now launched a one year with an interest rate of just 2.29 percent. Like a number of other lenders the lender has slashed some of its interest rates following a series of dramatic base rate cuts by the Bank of England, which has seen the base interest rate fall to its lowest level in history at just 1 percent.

Whilst the interest rate on the Woolwich mortgage is low officials have said that consumers need to be careful because they will be locked into the mortgage deal for three years. A number of other lenders have also launched low cost mortgage deals with attractive, , but in most cases the deals are only available to those with a sizeable deposit to put down, such as 40 percent of the property value, which will leave most and lower income buyers out in the cold.

After the initial year at 2.29 percent the Woolwich mortgage will then revert to a rate of base rate plus 2.29 percent for the remaining two years for which the borrower is locked in. With the base rate having fallen so steeply, and with further falls expected, some officials have said that banks are increasing the margin for customers who take out a tracker mortgage. For example, last year borrowers could get base rate trackers that were just 0.76 percent above the base rate but with the base rate so low this margin is getting wider.

One official said: ‘On paper, the initial rate is attractive, but it reverts to 2.29% above base after a year which isn’t so attractive, particularly at the moment where every month brings with it more economic woe. Right now confidence is low and a one year deal doesn’t exactly provide the stability many buyers crave. Coupled with that, if interest rates return to pre November 2008 levels of 5% then this deal may not look so attractive when you’re paying in excess of 7%.’

Tags: fixed rate mortgage, bank of england, confidence, mortgage, cheap mortgages, woolwich, first time buyers

Tags:

Related Entries

  • Mortgage payments up 15%
    • Mortgage payments across England and Wales are increasing, leaving many homeowners in a precarious situation.New figures, published by Woolwich Mortgages, shows that mortgage payments in April of this year reached £590.That is an increase of
  • Hips will wipe out sellers’ savings
    • People selling their home in the UK are currently making savings because the market is so competitive but all of that is about to change.According to mortgage provider the Woolwich, sellers are managing to save
  • 50% of income going on mortgage
    • Some Londoners are spending as much as 50 per cent of their take-home income on their mortgages.New figures from Woolwich highlight the precarious situation that many homeowners find themselves in and things could get worse
  • Loan service launched to help consumers avoid loans sharks
    • A new loans service has been launched in the UK to help consumers get the finance that they need to manage financially without having to turn to loan sharks, according to recent reports. There have
  • Banks top mortgage lenders table
    • Banks remained the cheapest mortgage lenders for existing borrowers in 2006.That is according to a new study by financial research company Defaqto, which also discovered that there was a huge difference between the cheapest and
  • OFT launches campaign to stop loan sharks
    • For a number of years loans sharks have been causing much concern for campaign groups, finance industry officials, regulators, and consumers, with many people falling victim to the unscrupulous practices of unregulated lenders running dodgy
  • Direct Line launches campaign against price comparison services
    • One of the UK's best known car insurance companies, Direct Line Insurance, has launched a campaign against price comparison websites that help consumers to find that they claim is the cheapest insurance for their needs.
  • Five year fixed rate mortgage launched by Co-op
    • Consumers that are looking to take out or switch to a fixed rate mortgage may be interested to hear that the Co-op has launched a new mortgage product that is said to offer a highly

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!