Woolwich launches new 10 year fixed-rate mortgage

Woolwich has just launched a new ten year fixed-rate mortgage in an attempt to attract those in the UK seeking a longer-term mortgage deal. This new mortgage's rate is fixed for ten years at just 5.29 per cent, after which it reverts to a tracker at base plus 0.95 per cent.

Prospective borrowers can only loan up to 60 per cent of the properties value (thus ensuring that they are not anywhere near being in the sub prime class). There is a £995 fee with a six per cent early repayment charge during the fixed-rate period. This product is aimed at the 1.7 million borrowers who will be finishing other fixed-rate mortgage deals during 2008.

This deal, even though it looks very good, will still mean that borrowers whose deals are coming to an end this year, will still end up paying more, as they are on rates that are below the current 5.25 per cent base rate.

However, the Council of Mortgage Lenders has reported that many buyers are increasingly turning to tracker mortgages, as most analysts are predicting that the Bank of England will cut interest rates further this year, thus making fixed rate deals less appealing.