In a move that may depress the remortgage market more Barclays is extending its Switch & Fix feature to all existing Woolwich mortgage customers who have taken out tracker deals.
Barclays is the first provider to give all existing tracker mortgage customers a ‘get out of tracker deal’ service. Switch & Fix (or ‘drop lock’) allows all existing and new customers on a Woolwich tracker mortgage to switch to any current Woolwich fixed rate mortgage deal with no early repayment charge. Barclays introduced the feature for new tracker customers in July but has now extended the option to all existing variable rate customers across its Woolwich mortgage range. Customers are free to switch to any product in the prevailing range of fixed rates including, for qualifying current account customers, Barclays loyalty mortgages.
In order to have access to the loyalty range, customers must have had their Barclays’ current account for three months and pay a minimum of £800 each month into the account. “This is the right time to extend the switch and fix service to all our customers because it’s still uncertain when and how quickly interest rates will go up,” said Andy Gray, head of mortgages for Barclays. “We know base rate is low now, so many people want to make the most of that with a tracker mortgage, but if rates go up at some point, that’s when a fixed-rate with set repayments will be valued,” he added.
For a customer who took out a tracker deal at base +2.29 per cent in October 2009 for a £150,000 mortgage and wants to switch across to a fixed rate, from today they would save £1,500 pounds by using Switch & Fix as they no longer have to pay an early repayment charge.