Capitalising on the low Bank of England base rate, Woolwich has announced two best-buy tracker mortgages.

The Barclays' mortgage brand launched a lifetime fee-free tracker mortgage at 3.19% for borrowers with a 30% deposit.

The lender has also reduced the interest rate on its lifetime tracker by 0.45% for people with at least a 30% deposit. The rate now stands at 2.79%, down from 3.24%. The loan charges a fee £999 fee and has early redemption penalties for the first two years.

With economists forecasting a low base rate for a longer period than expected, and tracker mortgages being generally lower than fixed-rate loans in the present climate, the popularity of tracker mortgages is soaring.

Andy Gray, head of mortgages at Woolwich, said: "We're seeing more interest in tracker mortgages, probably related to the combination of rock-bottom, stable base rates and an increasingly competitive market.

"These new mortgages have the potential to appeal to significant numbers of customers."

In the current scenario, Woolwich is one of the few lenders attempting to increase its market share.

It became the UK's fourth largest lender in 2008, writing nearly 9% of new mortgages, up from just 6% in 2007.

It recently said it had continued to grow its market share in the first half of this year, while the size of its mortgage book has increased by nearly £15 billion since the beginning of 2008.

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