New Woolwich lifetime tracker mortgage 'tracks and caps'

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New Woolwich lifetime tracker mortgage 'tracks and caps'

The Woolwich lifetime tracker mortgage has been introduced to the market as a UK first, in that it has the optional addition of a protective rate cap.

With the Bank of England raising the base rate last month for the third time since August, Woolwich has moved to introduce the so-called track and cap mortgage that will be 0.23 per cent above the base rate and can be capped at 5.99 per cent.

At present, with a base rate of 5.25 per cent, the rate of the Woolwich lifetime tracker is 5.48 per cent and the cap is intended for customers who are worried that the bank's base rate will continue to rise and break the six per cent barrier.

Andy Gray, head of mortgages for the Woolwich, remarked: "Most traditional capped rate mortgages are not linked to a base rate tracker, so it can be hard to get any real benefits when rates start to fall.

"With this you still get all the benefits of a base rate tracker in terms of flexibility but with the benefit of protection for the first two years after completion."

The protective cap can be made available with a fee of £595 and the capped rate of 5.99 per cent will last for the first two years of the term of the Woolwich lifetime tracker mortgage.

Under the terms of the Woolwich track and cap lifetime mortgage, there are no arrangement fees or early repayment charges and the minimum loan size available is £50,000, rising to a maximum of £500,000.

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