The mortgage has a £1,499 arrangement fee and an early redemption charge of 1 per cent of the original loan if the mortgage is repaid in full during the two-year tracker period.
Barclays points out that both current accounts and savings accounts can be offset against its offset mortgages, enabling borrowers to pay off their mortgage quicker, keep instant access on their savings and boost their savings rate with equivalent returns of more than 5 per cent.
All Woolwich tracker mortgages come with a ’switch and fix’ feature which allows borrowers to switch to any Woolwich fixed rate mortgage deal with no early repayment charge.
Defaqto insight analyst for banking David Black says: “An offset mortgage can make a lot of sense for the right borrower but it requires financial discipline. Woolwich’s new two-year tracker offset mortgage at 1.88 per cent above the base rate is one of the cheapest around for those seeking a maximum LTV of 70 per cent.
“It’s nearest, and slightly preferable competitor in terms of the rate and fee mix is Accord Mortgage’s two-year tracker at base plus 1.89 per cent. This has a lower fee of £995, making the Accord deal more cost effective than the Woolwich for mortgages up to £252,000. For mortgages over £131,000 the Woolwich offering is bettered by Accord’s two- year tracker at base plus 1.69 per cent, with a £1,996 fee.
“Both Accord mortgages will lend up to 75 per cent LTV but the Woolwich mortgage has the advantage of including a current account as part of its offset proposition, as well as a lower early repayment charge and a switch and fix facility.”
Black adds that people looking for a 70 per cent LTV tracker that is not an offset might like Chelsea Building Society’s two-year tracker at base plus 1.49 per cent with a £1,495 fee.