Barclays is cutting the rates on its 80 per cent loan to value Woolwich mortgages from today, 29 July, and is also introducing a ‘drop lock’ facility for new customers.

The 80 per cent Woolwich mortgage range includes a 0.21 per cent rate cut on its two year fixed rate mortgage, bringing it down to 4.38 per cent, a 0.10 per cent cut on its three and five year fixes, making them 4.79 and 5.49 per cent respectively.

A new Woolwich lifetime tracker mortgage is also being launched, with up to 80 per cent LTV, at a rate of 3.38 per cent above the base rate, and with a £999 application fee.

The new drop lock facility offers new customers who opt for a Barclays tracker or offset mortgage the opportunity to switch to a fixed rate in the future, without incurring any early repayment charges.

This option could solve the conundrum of fixed versus tracker mortgage for the many customers who are torn between the security of a fixed rate mortgage and the more attractive tracker deals while interest rates remain low.

Commenting on the new facility, Andy Gray, head of Barclays mortgages, said: “With speculation this week that UK interest rates are set to stay at record lows until 2014, the drop lock facility provides customers with peace of mind that they can go into a low tracker rate now and switch at a point in the future when they need greater security.”

Barclays expects the news of a second rate cut on its 80 per cent LTV range to we welcomed by those with smaller deposits.

The announcement follows one last month from Barclays that it is offering 90 per cent mortgages to customers buying a new Bovis Homes property, at 4.99 per cent fixed for two years.

© Fair Investment Company Ltd

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