Woolwich’s track and cap mortgage designed to protect against interest rate rises has been branded a gimmick by a leading broker.
The lifetime tracker stays at 0.23 per cent above base rate with a cap of 5.99 per cent for the first two years.
With base rate currently at 5.25 per cent, three further rises of 25 basis points each would trigger the cap.
Many commentators are predicting at least one more rate rise this year but Bradford & Bingley has suggested that base rate could return to 5 per cent in a year.
Hamptons Mortgages technical director Jonathan Cornell says: “It is a bit of a gimmick but not horrendous. It is unlikely the cap would come into play in the next two years but it is always nice to have the safety. Still, Woolwich has become much more innovative recently.”
Woolwich head of mortgages Andy Gray says: “Most traditional capped-rate mortgages are not linked to a base rate tracker so it can be hard to get any real benefits when rates start to fall. We believe this is the best mortgage available in the market.”