Woolwich pulls some long-term deals

Woolwich reduced a number of its tracker rates last week but offset this by pulling or hiking rates on some longer term fixed deals.

The lender has withdrawn its 85% LTV five-year fixed rate and increased the rate on its 70% LTV five-year fixed deal to 4.99% from 4.79%.

It made cuts of up to 0.3% on its trackers, two-year fixes and offset deals, but says the cost of funding meant it had to chop some longer term deals.

Dale Jannels, sales and marketing director at All Types of Mortgages, says more clients are looking for long-term fixed rates to ensure financial stability, so he is surprised to see Woolwich hike its rates.

He says: “It’s something of a surprise that an influential lender such as Woolwich has increased its three-year fixed rates by 0.4% to 4.29% at 60% LTV and its five-year fixed rates by up to 0.3% at 60% LTV and 0.2% to 70% LTV.”

But a spokesman for Woolwich counters that the changes are necessary to remain competitive.

Andy Gray, head of mortgages at Barclays, says: “We have made changes to our short-term fixed rates and trackers despite the cost of funding fixed rates rising.”

He adds that offset mortgages are growing in popularity as savers with mortgages take advantage of better returns in a low interest rate world.