There are signs of competition beginning to return to the mortgage market. Woolwich has just launched its cheapest ever fixed-rate mortgage of 2.29%. Applicants need a 40% deposit. It’s fixed for a year.
After that customers are switched to a tracker mortgage for the rest of the loan. The group’s tracker currently charges 2.29% above Bank of England bank rate. It also only applies to people who want mortgages of between £200,000 and £500,000. Where mortgage companies also make their money is in the application fee. Anybody wanting the Woolwich deal must pay a £995 application fee.
Other lenders have launched new offers. HSBC offers a two-year discount deal of 2.99%. Again it needs a 4O% deposit. For people with a 25% deposit NatWest has launched a 3.49% two-year fixed-rate deal. Halifax has a two-year fixed-rate mortage at 2.99% if you have a current account with the company or if you are prepared to switch to it.
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