Woolwich claims to “beat the base rate” with new mortgage

Woolwich has launched a new mortgage offer, which includes features of a fixed-rate and a lifetime tracker product, and will reportedly help customers manage rising interest rates.

The mortgage will have a fixed-rate of 5.19 per cent for two years before reverting to a lifetime tracker rate at 0.19 per cent above the base interest level.

According to Woolwich, this is the only short-term fixed-rate product on the market which reverts to "such a low rate" after the introductory period.

This package is available at 80 per cent loan-to-value, with early repayment charges of three per cent of the balance until January 31st 2009 and an application fee of £995.

Andy Gray, head of mortgages for Woolwich said: "Economists are divided over how much higher interest rates will go with many expecting one if not two further rises.

"This new product allows borrowers, nervous about short term interest rate movements, to fix now to cover any short term hikes but then have the advantage of switching to a market leading lifetime tracker in two years, which could have the advantage of tracking rates down if the interest rate situation takes a turn for the better."