The Woolwich is offering a lifetime tracker which will track at 0.01 per cent below the base rate for two years, making it the market-leading lifetime tracker.
John Charcol senior technical director Ray Boulger says Woolwich is brave for taking a different approach to other lenders and says the new product is the most competitively priced lifetime mortgage.
The mortgage, which reverts to a lifetime tracker at 0.17 per cent above base rate after the initial two years, has no early repayment charge but the application fee is 1,495.
Boulger says it illustrates the difference between Woolwich, which is adopting a robust retention strategy, and other lenders, which focus on short-term offerings.
He says: “There is a dichot-omy between lenders saying they want to take a long-term approach and between the products they offer in gen-eral, which are designed to do the opposite. The vast majority of products are for two years despite lenders saying they are looking for the nirvana of retention strategies.
“I would not expect a mad rush of lenders following Woolwich but if anyone did, then Nationwide would be my best guess.”