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Cheap mortgages could reduce need to shop around

Date: Wed, 24 May 2006

The changing mortgage market means that cheap "lifetime" loans could offer an alternative to remortgaging every few years.

High-street lenders such as Woolwich and Abbey are now offering cheap mortgage deals that claim to represent good value in the long-term rather than initial discounted rates.

Many homeowners switch their deal every two to three years in order to find the best mortgage deal. However, the growing cost of switching lender could outweigh the benefits of finding a long-term cheap mortgage offer.

Woolwich claim that its lifetime tracker mortgage product is cheaper for anyone borrowing £150,000 or less compared to switching to the best two-year discount variable offer.

Jonathan Cornell, the technical director of Hamptons International Mortgages, speaking to the Daily Telegraph, said: "Woolwich's new lifetime mortgage is such a good product that it is a danger to mortgage brokers. Once people move onto it they will no longer need to contact their broker every two years to find a better rate."


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