Woolwich has introduced this 10-year fixed-rate deal to help boost the availability of longer-term mortgages at a time when there is increased volatility in the mortgage market.
John Charcol product specialist Katie Tucker says: “This is easily the market leading 10-year fix, with a rate lower than two, three, or five-year fixes, except those with a big fee.”
She likes the fact that, as with all Woolwich residential products, free valuation and free legal fees are available for remortgages.
However, Tucker is critical of the early redemption charges. “The main downsides are the high ERCs of 6 per cent throughout the 10 years and the fact that the ERC-free overpayment facility is 5 per cent. Also, as with all Woolwich products except the offsets, any overpayments which are re-borrowed are charged at SVR,” she says.
According to Tucker, there are not any similar deals that can touch the Woolwich product in terms of rate. “RBS has one at 5.64 per cent which is only a better choice for higher LTVs up to 95 per cent and if you think you need lower ERCs in the final years, as it reduces to 4 per cent, 3 per cent, 2 per cent and 1 per cent at the end. However, Halifax has a 6 per cent ERC all the way through.”
Tucker concludes: “The portability situation is very good. Despite the maximum LTV at this rate being 60 per cent, the mortgage can be ported at any LTV up to 95 per cent. Borrowers also have up to six months from redemption to port it to a new property.
“This compares very favourably with Halifax, which will not allow any leeway at all for porting between the sale and purchase date. It must be simultaneous with Halifax or it cannot be ported.”