Barclay's mortgages division Woolwich has launched its new 'city mortgage 2' product targeting the larger loans market, following the success of its previously pioneered 'city mortgage' product in October 2006.
The revamped product is taking over from the initial ‘city mortgage’ product to offer the lowest lifetime tracker offset rate, with a minimum loan size of GBP500,000. The previous product offered a nine-month discount followed by a lifetime tracker at a higher rate. The lifetime rate will track base rate at +0.34% with an initial rate of 5.34%.
As December is the month that the first 2006 bonuses are set to be paid this new product allows customers to immediately offset their bonus against mortgages over GBP500,000. It makes sense to change the product to a simple tracker at lower rate as this will be of the most benefit to customers, said Andy Gray, head of mortgages for the Woolwich. For a city worker receiving a bonus of GBP50,000 they could save over GBP100,000 interest and chop four and a half years off their mortgage by offsetting.
The mortgage service allows ‘city workers’ to purchase properties prior to receiving their bonus, giving them the opportunity to secure the property now before it sells.
In addition, the mortgage has no early repayment charges, an 85% loan to value and an application fee of GBP995.