Woolwich rate cut boosts mortgage market

by Ed Bowsher on 06 October 2009  |  2 comments
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Woolwich has announced a cracking 2.79% tracker mortgage. This is the best variable deal for those with a 30% deposit. Today's move is a further sign that the mortgage market is gradually thawing.

The mortgage market continues to unthaw. 

Woolwich has today announced rate cuts on its lifetime tracker mortgages which make them table-topping products. It's very welcome news for borrowers. Especially those with a 30% deposit.

You can now get a lifetime tracker mortgage with the Woolwich at 2.79% (base rate plus 2.29%.) That's a 0.45% cut from the previous offer. That's a cracking rate and you're only locked-in on this deal for two years. If you don't want to pay a fee, you can sign up for a 3.19% deal. 

Admittedly, Woolwich's 2.79% rate is still higher than the 1.99% you'll pay on HSBC's best variable rate mortgage. But with HSBC, you'll need a 40% deposit whereas Woolwich is only asking for 30%. 

Woolwich is clearly making a big effort to win market share in mortgages. At the beginning of 2008, Woolwich was lending £69.8bn - that figure has now risen to £84.4bn. There are three players who are making the running in UK mortgages - HSBC, Abbey (owned by Santander), and Woolwich (owned by Barclays.) All three players have had relatively good credit crunches and have decent balance sheets. They can take advantage of other players' weakness and capture new customers. 

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