Woolwich launches UK's first "track and cap" mortgage by Finance News Bulletin

Published: 21/02/07

Designed to give British homeowners with some protection against the current economic doubt in the UK home mortgage loan sector following the lately announced increases in base rate by the Bank of England, the Woolwich has recently launched one of the most ground-breaking UK home mortgage packages of recent times – the UK’s first ever "path and cap" mortgageThe product is intended to provide UK homeowners with the security of both a cap on the home loan interest rate they have to pay – in the same way as a fixed speed mortgage loan would do - while also offering the proprietor with the opportunity to benefit from a variable rate on the Bank of England's then bottom rate if the Bank of England's base rate advantage the margin) is less than the advertised fixed speed capInitially, Woolwich will charge its customers a 023 percent margin above the store of England's base rate, sense that customers will be charged interest at a speed of 5

48 percent The introductory fixed speed present is 599 percent for the first two years Consequently, homeowners will at present be charged 5

48 percent, but can also feel at ease, in these times of rising interest speed, meaningful the maximum interest rate they'll be charged on their home mortgage loan over the next two years is going to be 599 percentOne the back of the launch, head of mortgages at the Woolwich, Andy Gray commented that: "set tax are still expensive in comparison to trackers, and with swap rates title ever higher they don’t look as if they are going to get any cheaper in the short word This is why we have launched this unique product, 'track and cap' if you similar to, with no lock-ins it gives consumers the most excellent of both worlds – a market-leading rate with a guarantee, so if rates go up you are protected and if rates head south you win

"exchange rates are what fixed speed home mortgage loans are based on and on the back of three recent interest rates by the Bank of England, many of the UK's leading house mortgage loan lenders have now reserved their 'best offer' fixed speed promotions in favor of tracker speedsThe Woolwich 'cap and track' home mortgage also has no arrangement fee or near the beginning repayment charge and is a flexible mortgage in that it does let for overpayments, underpayments and payment holidays However, it is only available on mortgages of 80 percent of the property purchase price and there is a one-off charge of £595Nevertheless, Meleanie Bien, connect director at independent mortgage broker Savills Private Finance, is warning UK homeowners not to get too excited about this 'fairly innovative' product

Issues that Ms Bien highlights borrowers need to be conscious of are that the built in margin Woolwich are charging is relatively far above the ground - when compared with present tracker home mortgage rates on offer in the UK - and the cap that Woolwich have put on this novel product is relatively high - when compared to the utmost rate that industry experts predict will be reached in the next two yearsAs a result, customers may be left in a position where they are paying slightly more than the most excellent value tracker mortgage offers, with little or no chance of the limit rate being reached in the foreseeable future not as good as, after two years the cap will disappear and the home mortgage loan will revert to follower home loanWith the price of property ever increasing and no sign of the long awaited bursting fizz of the accommodation market, we ask what can young first time buyers do to gain their freedom and put up a home of their own in such an expensive arena and what is a mortgage anyway

The biggest difference between a mortgage and other types of loan is the fact that the interest rate changes throughout the term of the loan Why is this And which type of interest-rate arrangement is most excellentIt’s easy to say 'go and research the marketplace place to find the cheapest mortgage', but is it that easy to actually do it and how do you know that you have really got the best mortgage deal when you’ve finished

Early salvation Penalties - Loan Extras - Debt Consolidation Bad praise - Choosing a Personal Loan - Loan Penalties - Money economy

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