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Woolwich has slashed rates below 4% for borrowers looking to fix for two, three or four years.

It’s reduced its two-year fix and track mortgage from 4.39% to 3.89%, a reduction of 0.5%
It’s also reduced its three year fixed rates have been by 0.7% points from 4.69 per cent to 3.99%.
At the end of the fixed period all fixed rate mortgages revert to a tracker rate of 1.49% above base for the remaining life of the mortgage.
The Woolwich has also launched a new range of four year fixed rate mortgages designed purely for home purchase.
For buyers with a 20% deposit, the rate will be fixed at 4.99% for four years with the same follow-on rate of 1.49% above base for the remaining term of the mortgage. The rate is fixed at 3.99% for borrowers with a 40% deposit.
Chris Keane, head of mortgage products for Barclays, says: “While a large percentage of our customers are remortgagers, we have acknowledged the needs of buyers at this time with the dedicated purchase-only deal designed specifically to meet the requirements of this group.
“The rate is fixed for four years to match the average term of tenure in a first property and, at under 5% for up to 80% LTV, looks very attractive.”

These deals and all others currently available in the UK mortgage market are available via The Money Helper at www.themoneyhelper.co.uk or 0845 003 0065

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Shares in Lloyds Banking Group fell another 7% in this morning’s early trading session as the bank continues to feel the pressure from Friday’s announcement of huge losses at HBOS.

At their lowest, the bank’s share fell by 32% on Friday after HBOS announced losses of over £10bn for 2008.

Friday’s news sparked fears that the government would be forced to pump even more money into the bank, or possibly nationalise it.

Lloyds has also been criticised in the past week for planning to pay up to £150m in staff bonuses, despite being 43% owned by the government.

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Lloyds Banking Group’s shares plummeted by 32% today after it revealed it expects HBOS to report an underlying loss before tax of £8.5bn and further write-downs of £1.5bn for 2008.

Lloyds says since HBOS’s last trading update in December 2008, trading has been further impacted by increasingly difficult market conditions, an acceleration in the deterioration of credit quality and falls in estimated asset values.

The key elements of the loss are the £4bn impact of market dislocation and approximately £7bn of impairments in the HBOS corporate division.

The market dislocation has been driven by deterioration in asset quality and falling market valuations.

While the group says Lloyds TSB traded profitably and satisfactorily in 2008 and expects to report a profit before tax from its continuing businesses, including the impact of approximately £1.3bn from market dislocation, of some £2.4bn.

On the back of the news Lloyds Banking Group’s share price fell a whopping 21% to 62p per share.
Eric Daniels, group chief executive of Lloyds Banking Group, says: “HBOS’ 2008 results have been adversely affected by the impact of market dislocation, which accelerated significantly in the last quarter of 2008, and the additional impairments required on the HBOS corporate lending portfolios.
These impairments primarily reflect the application of a more conservative recognition of risk and the further deterioration in the economic environment.
Whilst we recognise that the short term outlook is more challenging, Lloyds Banking Group has the largest UK financial services franchise, with excellent long-term earnings potential. The Group will provide an update to the market on 27 February 2009, and is already making good progress in integrating the two businesses.”

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The number of homebuyers taking out 100 per cent mortgages has doubled in a year, a top broker said last night.

Many are borrowing up to 125%, giving them cash for furnishing and decorating but leaving them facing instant negative equity.

Banks and building societies are now rushing to offer such mortgages, which help people get on the property ladder even if they have no savings.

Brokers London & Country said the number taking out 100% mortgages had ‘more than doubled’ in the last year. For mortgages over 100% there had been a 95% rise.

Another broker, Mortgage Advice Bureau, said 50% more people had taken out 100%-plus loans.

There are now a record 155 such mortgages on offer, according to the research firm Moneyfacts.

Last week Alliance & Leicester said it plans to launch a ‘Plus Mortgage’, of up to 125%. Other lenders include Birmingham Midshires, owned by the Halifax, Northern Rock and Coventry Building Society.

The massive mortgages are popular not only with first-time buyers but also with divorcees who have left the family home and have no savings to buy a new one.

They let people escape the cycle of trying to save while paying for rented accommodation. But if prices began to fall, they would face disaster.

The high mortgages usually have an interest rate at least one percentage point higher than other loans, while some lenders add an extra charge of £2,000 or £3,000. But experts said such mortgages should become cheaper as more lenders offer them.

The Council of Mortgage Lenders said about 22,000 people took out a mortgage of 100 per cent or more last year, around two per cent of all home loans.

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