Woolwich cuts mortgage rates
Updated on 15 September 2008
Barclays' mortgage arm Woolwich has become the latest firm to cut interest rates on its home loans.
The Woolwich announced it was trimming rates on fixed and lifetime tracker mortgages, including two-year, three-year and 10-year fixed rates products.
It said changes included cutting the rate on its two-year fixed rate from 5.99% to 5.79%, while 10-year fixed rates were seeing a reduction from 5.69% to 5.64%, although the mortgages are only available to those with a deposit of 40% or more of their property's value.
The move continues the current trend among lenders to reduce the cost of borrowing, helping to push fixed rate deals back down to their pre-credit crunch levels.
Last week, Lloyds TSB's lending arm Cheltenham & Gloucester, Abbey and first direct all announced reductions.
But the news from the Woolwich comes amid warnings that the demise of US investment bank Lehman Brothers will bring an end to the recent flurry of rate cuts.
Michelle Slade, analyst at Moneyfacts.co.uk, cautioned the Lehman Brothers' bankruptcy will see banks become wary of lending to each other once more, which was likely to push up wholesale borrowing costs and eventually see homeowners face higher rates.
She said: "The longer the banks face an increased cost of borrowing, the more likely it is that UK mortgage customers will be hit.
"It usually takes around two weeks for any increase to filter through to mortgage rates and only then will we be able to for certain see what impact Lehman Bros has had on the UK mortgage market."
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