Rate Watch: the best rates for mortgages, savings accounts and child trust funds

Lorna Bourke's Rate Watch scans the markets for the deals that offer great rates and make the most sense for most people.

All offers are independently handpicked by Lorna Bourke and neither she nor Citywire receive any form of commission or kickback for the selections.

Mortgages: 5.29% Woolwich 10-year fixed rate

The launch by Woolwich of a market leading 10-year fixed rate mortgage at the very competitive rate of 5.29% is an attractive option for a number of borrowers. Homeowners coming up to retirement who will still have a mortgage after retirement need to know what their costs are going to be. Pensions cannot be increased in the way that earnings can and if you don’t expect to move again, locking yourself into a fixed rate deal could be a good idea.

‘There is a fee of just £995 and free valuation and legals on remortgages. This is only available up to 60% loan-to-value, but will suit many remortgagers who want to secure their budget and can commit for ten years,’ says Katie Tucker of mortgage broker John Charcol. 

Andy Gray, head of mortgages for the Woolwich, says, ‘we believe this will be the best priced long term product in the market place. With the Government looking to encourage longer term fixes, and with consumers looking to avoid short term volatility, we expect this product to be popular with borrowers. If nothing else it will certainly show whether consumers have an appetite to fix over the longer term, as the rate is hugely competitive at 5.29%.’

Borrowers can overpay up to 5% per annum without any charge and there is a 6% early repayment charge during the fixed rate period. The mortgage is on offer to both existing and new customers. Those switching from another lender can use the Woolwich Switch & Save package with no valuation and legal costs and the loan is fully portable to another property. It is available through intermediaries or direct from Barclays. For more information telephone 0845 607 1111.

Savings Account: 6.45% Coventry Building Society

Coventry Building Society has just launched (20.3.08) a new notice savings account for the over 50s offering probably the best rate available at 6.45% which includes a bonus of 0.6% for the first year. The interest rate is guaranteed to be at least 0.25% above Bank Base Rate until 31 March 2010.

The only drawback is that the minimum investment is £10,000, with a maximum of £250,000. Penalty-free withdrawals are permitted with 60 days’ notice. Instant access is available subject to a 60 day penalty.

Rachel Haworth, head of marketing at the Coventry says, ‘we are pleased to extend our savings range by now offering this best buy account to the over 50s. For those customers who already have a Sixty-Plus Notice account, it’s good news too, as they will also benefit from the increased rate and guarantee.’  Full details at www.thecoventry.co.uk.

Child Trust Funds: 8% variable Hanley Economic Building Society

The vast majority of the 2.5 million Child Trust Fund vouchers issued to date have been invested in cash funds and when you look at the rates on offer, it doesn’t seem worthwhile taking a chance in equities – at the moment. 

Hanley Economic Building Society is paying a whopping 8% variable on CTFs, a whole one per cent better than its nearest rival Chorley Building Society at 7%. The only problem is that the account is available only online, or at branches of Hanley Economic – which may not be convenient. 

The account is open to all and you can invest up to £1,200 a year, the maximum allowed, in addition to the £250 or £500 CTF voucher. The Chorley account has the advantage that you can open it by post.  Full details at www.thehanley.co.uk/child-trust-fund_265.html or www.chorleybs.co.uk.