Woolwich is to introduce a product that is a combination of fixed rate and lifetime tracker.
The mortgage is fixed for the first two years at 5.19% and then reverts to a lifetime tracker at 0.19% above base rate safeguarding consumers against further interest rate rises.
There are no early repayment charges after the initial two-year fix. This is the only short term fixed rate on the market that reverts to such a low rate after the fixed period.
Andy Gray, head of mortgages for Woolwich, says: “This new product allows borrowers, nervous about short term interest rate movements, to fix now to cover any short term hikes but then have the advantage of switching to a market leading lifetime tracker in two years which could have the advantage of tracking rates down if the interest rate situation takes a turn for the better.”