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Woolwich and Halifax in clash on interest deals

Woolwich and Halifax are going head to head by only charging interest on

the difference between customers&#39 borrowings and savings.

Woolwich has just set up the Open Plan “offset mortgage”, which it says

builds a virtual link between a customer&#39s secured borrowing and savings.

This is one of the core propositions of Halifax&#39s new venture, Intelligent

Finance, which starts next month.

While the Woolwich terms its interpretation of the concept as

“offsetting”, IF calls it “netting off”. Both lenders are adamant that

their offeringis superior.

The two companies are battling for superiority among intermediaries, with

the Woolwich paying brokers an introductory procuration fee of 0.5 per cent

for mortgages.

IF is paying commission on new mortgages at 0.35 per cent, 0.1 per cent on

savings up front when the accounts are opened plus 1 per cent commission on

first loans, 0.5 per cent on subsequent loans as well as £25 per

current account and credit card account opened.

Woolwich corporate public relations manager Rob McIvor says: “We have had

the Open Plan offset on the cards for a time now. The difference is that we

have waited until we are capable of delivering it before we started

promising it.”

Intelligent Finance head of sales Ian Jeffery says: “Even ignoring price

comparisons, the Woolwich is a pale imitation of the Virgin One account

without a credit card and falls well short of IF&#39s offering.

“It appears we are shaking up the market and this is evidenced by the

latest moves.”

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