The Woolwich is launching a larger loan mortgage product for amounts over £500,000 as it sees bonuses becoming a reality rather than a future hope.
Its second phase of the City Mortgage it launched in October with its “buy now offset your bonus when you get it” message will be Woolwich’s lowest ever lifetime tracker offset rate.
City Mortgage 2 will be Woolwich’s lowest ever tracker offset rate, which will track base rate at +0.34 per cent with an initial rate of 5.34 per cent.
This mortgage also gives ‘city workers’ flexibility to purchase properties before their bonus gets paid to give them the opportunity to secure the property now before it sells.
It will offer fully flexible offset mortgages with option to overpay, underpay, incorporate payment holidays and offset balances in saving and current accounts.
It has an application fee of £995 and is at LTV of 85 per cent.
City workers will get an effective interest rate of 8.90 per cent as a higher rate tax payer, a tax efficient home for savings with no early repayment charge
Woolwich head of mortgages for the Woolwich Andy Gray says: “As December is the month that the first 2006 bonuses are set to be paid this new product allows customers to immediately offset their bonus against mortgages over £500,000. It makes sense to change the product to a simple tracker at lower rate as this will be of the most benefit to customers. For a city worker receiving a bonus of £50,000 they could save over £100,000 interest and chop 4 and a half years off their mortgage by offsetting.”