In a sign of rapidly increasing competition in the mortgage market, Woolwich, the mortgage arm of Barclays has announced it is launching its lowest ever fixed rate mortgage at 2.29%.

This is a full 1.5% lower than Woolwich’s previous rate for this mortgage, and the lowest mortgage on the market for either tracker or fixed rate mortgages according to Defaqto mortgage tables .

After one year the mortgage switches to a competitive tracker at 2.29% above base rate for life, which at current rates would be 3.79%. The mortgage is offered at 60% loan to value.

Mortgage details
- First year fixed at 2.29% then reverting to base plus 2.29% for life (current pay rate 3.79%).
- Max LTV 60%
- ERC 2% for initial 3 year period
- Application fee £995
- Minimum loan size £200,000, maximum loan size £500,000
- Available with Switch & Save, so customers can remortgage without paying legal or valuation fees.
- Available to all customers, including both branch and intermediary customers.

“We are seeing some of the best mortgage rates in a generation,” said Andy Gray, head of mortgages at Woolwich. “This is down to increasing competition and the falling cost of lending for the banks.

“We’ve launched a market leading product with a low application fee, great headline rate and no legal or valuation costs for those customers remortgaging to Woolwich.

“As a combined fixed rate and tracker mortgage it has the best of both worlds – an exceptional fixed rate, followed by a competitive tracker guaranteed for the life of the mortgage.”

Throughout the market turmoil, and as others have left the market or reduced their lending, Woolwich, the lending arm of Barclays has been consistently offering competitive deals. As a result, at the end of third quarter, 2008 Woolwich had provided 32% of the UK’s new net mortgage lending, up from 7% in 2007.

More information on the full range of Woolwich mortgages is available at www.barclays.co.uk/mortgages.