Woolwich announces its lowest-ever flexible mortgage rate
Author: Andy Bedford » Publish Date: 17 September 2009
The Woolwich has announced a new tracker at 1.48% above the base rate for the first year, reverting to 2.49% above the base rate for life, giving their lowest-ever headline mortgage rate of 1.98%; currently.
The product has a minimum loan of £200,000 and a maximum of £500,000, so it is restrictive; early repayment charges are 2% until 31/01/2013, meaning it does tie you into the rate for a prolonged period.
The product has a £999 arrangement fee; based on a loan of £200,000 at 60%, a valuation fee of £415, a lender Conveyancing fee of £126, a land registry fee of £280 and a completion fee of £35, while APR is 3.0%.
The big caveat to this product is that the option to switch to a Woolwich fixed rate without penalty during the early repayment charge period, which Woolwich call “drop lock”, does NOT apply to this product.
So while its headline rate may be very tempting if there are significant rises in interest rates, particularly in the second and subsequent years of the mortgage, it could become very costly indeed, particularly as early repayment charges on a minimum loan of 200K would amount to four thousand pounds as well!
For this reason, I would recommend seeking mortgage advice about the suitability of this product if it has your interest, and as usual, read the Key Facts Illustration prior to making any decision on a mortgage product.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. There may be a fee for mortgage advice. The amount will depend upon your circumstances but it is typically £200 or up to a maximum of 1.5% of the loan value.
Some buy-to-let and commercial loans are not regulated by the Financial Services Authority.