Woolwich launches City bonus mortgage

Woolwich has launched a new type of mortgage - aimed at people who receive a large chunk of their salary in their annual bonus.

In many large City firms, annual bonuses can make up 40 per cent of total pay, and with a record bonus season predicted for workers, Woolwich has acted to help them secure the properties they really want.

The new mortgage is designed for people wanting to buy now, but who will not have the means to do so until their bonus arrives.

But the new product allows people to take out their mortgage now, at a discounted rate, then pay their bonus in to offset the loan later.

"Most people expecting a large bonus in January or February will already have a good idea if they are going to get one," said Andy Gray, head of mortgages for Woolwich.

"The problem is it doesn't get paid until the new year.

"If they wait for the bonus the property may have gone."

The new Woolwich City bonus mortgage is only available to people wanting to borrow more than £500,000.

The loan is fully flexible, with no fees for early repayment, drawdown facilities included, and the possibility of offsetting the loan against savings and current accounts.

The mortgage charges an initial rate of 4.24 per cent, although it comes with a hefty arrangement fee of £1,499.

"The beauty of this loan is that customers can borrow now at a lower rate whilst they are waiting for the bonus to be paid," Mr Gray said.

"When they receive the bonus, they can then offset against the loan, reducing the payments and keeping costs down or simply pay off part of the mortgage without charge.

"It really is a flexible loan designed for those with large lump sums going into their account." XXX