The lender said City Mortgage 2 was Woolwich’s lowest ever lifetime tracker offset rate. It takes over from the initial City Mortgage, which offered a nine month discount followed by a lifetime tracker at a higher rate. The lifetime rate will track base rate at +0.34% with an initial rate of 5.34%.

Andy Gray, head of mortgages for Woolwich, said: “As December is the month the first 2006 bonuses are set to be paid, this new product allows customers to immediately offset their bonus against mortgages over £500,000. It makes sense to change the product to a simple tracker at lower rate as this will be of the most benefit to customers. For a city worker receiving a bonus of £50,000, they could save over £100,000 interest and chop four and a half years off their mortgage by offsetting.”