by Mark Johnston
Barclays bank, under its Woolwich brand has launched a new ‘Switch and Fix’ product that will allow all its customers to move from a tracker mortgage to a fixed rate mortgage without incurring an early repayment charge.
Woolwich mortgages have lead the way in lifetime tracker mortgages, they account for over 60% of all their mortgage portfolio. The new product has been designed to offer all existing customers that have taken out a mortgage since 2006 a way of getting out of their tracker mortgage. The Woolwich will allow them to switch from their tracker mortgage and move to any of their fixed rate products without charging any sort of early repayment charge. The change will benefit customers who have taken out a tracker mortgage but are now worried about potential interest rate changes and would like to fix their rate to provide them with some element of security.
Barclays’ mortgage arm, the Woolwich started offering their customers the switch and fix option back in July for new tracker customers but have now extending it to existing customers as well.
Andy Gray, Barclays head of mortgages said “This is the right time to extend the Switch & Fix service to all our customers because it’s still uncertain when and how quickly interest rates will go up. It underlines our strategy of offering value to our existing customers and making it easy and transparent for them to switch onto a fixed rate at the time they decide it is most appropriate for them. We know base rate is low now, so many people want to make the most of that with a tracker mortgage, but if rates go up at some point, that’s when a fixed rate with set repayments will be valued. Since introducing Switch & Fix in the summer, we have seen a third more customers opt for trackers as this gives them a sense of security in a time of interest rate uncertainty.”
Customers who took out a 2.79% tracker mortgage (0.5% base rate plus 2.29%) last year for £200,000 would no longer have to pay £2,000 in early redemption fees with the new changes.
The change follows news that Barclays reached £100 billion in lending by adapting to the post credit crunch world and offering inventive and market leading products by listening to what their customers want.
This follows on from Barclays hitting a milestone last week with mortgage lending reaching £100bn, which has been achieved by evolving and adapting the mortgage range to ensure borrowers’ needs are met in the changing market place, providing the long term value that Barclays strives for.
Barclays have been celebrating this achievement by slashing its interest rates on one of its tracker mortgages by 0.41%. Following the cut, their 70 percent loan to value (LTV) mortgage is now priced at 2.08% plus base rate so with the Bank of England rate so low at 0.5%, borrowers would be expected to pay 2.58% so long as they had the 30 percent deposit. The 75 percent loan to value (LTV) was also cut to 2.39% plus the 0.5% base rate.
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