Barclays and HSBC continue mortgage race

Tuesday, 06 October 2009 12:07

Barclays today cut its rates on its Woolwich tracker mortgage, while HSBC has responded by extending its 1.99 per cent discount deal.

Barclays is today cutting 0.45 per cent from its tracker mortgage putting it at 2.79 per cent (2.29 per cent over the base rate) for up to 70 per cent loan-to-value with a £999 fee.

The Woolwich range is also being bolstered by a new fee-free tracker at 3.19 per cent (2.69 per cent over the base rate).

Andy Gray, Woolwich head of mortgages, said: "We're seeing more interest in tracker mortgages, probably related to the combination of rock-bottom, stable base rates and an increasingly competitive market.

"These new mortgages have the potential to appeal to significant numbers of customers."

The new rate puts Barclays level pegging with ING Direct on its 75 per cent LTV deal at 2.79 per cent with a £795 fee.

HSBC has a life time tracker at 2.74 per cent up to 60 per cent LTV with £999 fee and one at 2.95 per cent for 75 per cent LTV with £699.

HSBC has also responded to the Barclays cut by extending the offer on its 1.99 per cent discount mortgage deal.

The deal is limited to 60 per cent LTV and comes with £1199 fees.

Since the launch of the mortgage, HSBC has lent £245 million on the mortgage.

With average house prices at £163,533, according to the Halifax today, this means HSBC has sold around 2,500 of the discount trackers.

Martijn van der Heijden, head of mortgages at HSBC, said: "Our range of mortgages have topped the best buy tables for most of the year.

"We made a commitment to stay open for business and extending the 1.99 per cent mortgage is part of that."

After the launch of the 1.99 per cent mortgage at HSBC, Barclays responded with a 1.98 per cent rate - which starts at the low rate for a year then increases to 2.49 per cent over the base rate, currently 2.99 per cent, also up to 60 per cent LTV.

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