Woolwich has launched what it is calling the ‘City Bonus’ mortgage to target bankers, brokers, consultants and entrepreneurs who expect large bonuses this winter.
It says that only those who wish to borrow over £500,000 need apply. The new discounted tracker with an offset facility starts as a 0.51 per cent discount below the bank’s base rate offering an initial pay rate of 4.24 per cent.
This carries on until July 2007 when it reverts to base rate plus 0.49 per cent (5.24 per cent at present ) for the life of the loan. It has a £1,499 fee with no early repayment charges.
Woolwich head of mortgages Andy Gray says: “The key to the mortgage is that it offers full offset facilities which could be of great help to customers who want to get into the market now.
“Most people expecting a large bonus in January or February will already have a good idea if they are going to get one. The problem is it doesn’t get paid until the New Year and if they want to buy a property now they might be restricted by what they can borrow and by the choice of mortgage type. If they wait for the bonus the property may have gone.
“The beauty of this loan is that customers can borrow now at a lower rate whilst they are waiting for the bonus to be paid. When they receive the bonus, they can then offset against the loan, reducing the payments and keeping costs down or simply pay off part of the mortgage without charge. It really is a flexible loan designed for those with large lump sums going into their account.”