Fixed-rate mortgage cost cut
Updated on 22 September 2007
The Woolwich has became the latest lender to announce it was cutting the cost of its fixed-rate mortgages.
But unlike a number of other lenders, the group said it did not plan to increase the rates it charged on its tracker home loans despite the current turmoil in credit markets.
The group is reducing its five-year fixed-rate loan by 0.5% to stand at 5.59%, while it is cutting its two-year deal by 0.3% also to 5.59%.
The new rates, which will be available from Tuesday, add to the group's recently launched 10-year fixed-rate loan which also charges interest of 5.59%.
The Woolwich, which is part of the Barclays Group, also announced it was holding its lifetime tracker mortgage rate at 0.17% above the Bank of England base rate, giving a current rate of 5.92%.
Last week the UK's biggest mortgage lender Halifax and the country's second biggest lender Abbey both said they were raising the rates charged on some of their tracker mortgages by between 0.1% and 0.2%.
A number of other groups have since followed them with Standard Life, other members of the Halifax Bank of Scotland Group and Alliance & Leicester all increasing some of their variable rates.
But while the cost of variable rate mortgages is rising due to the current turmoil in the credit markets, swap rates, upon which fixed-rate mortgages are based, are falling, leading to many lenders cutting the price of their fixed-rate deals.
Andy Gray, head of mortgages for the Woolwich, said: "It is almost unprecedented to be able to offer two, five and 10-year fixed rates at exactly the same rate.
"It also means that borrowers who are on very competitive two-year deals that finish this autumn are going to see a much lower increase in their mortgage payments than they might have feared a month ago. The other good news is that unlike our competitors our strong position means we are maintaining and not changing any of our tracker rates, meaning we can offer attractive deals in all segments of the market."
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