Yorkshire Building Society Market Leading Mortgage Rate
Competition to offer mortgage rates below 1% has intensified as a mortgage company launched a market-leading deal.
Yorkshire Building Society said the two-year follow-up rate of 0.78% is available to borrowers with a 35% deposit, and has a fee of £ 995 and a free standard assessment.
The mutual has also introduced several other trackers, including a tracker rate of 0.89 offered to homebuyers or those refinancing with a 25% deposit, which also comes with a £ 995 fee and a free standard assessment.
Read more: Yorkshire and the Humber region continue to outperform most of the UK
For borrowers with smaller deposits, a two-year rate of 2.59% is available for those with a 5% deposit.
Follow-up mortgages are variable rate agreements that tend to follow the Bank of England base rate above a certain margin. This means that the interest charged on a mortgage depends on how the base rate changes.
If the base rate drops, the interest rate charged will also drop, but if the base rate increases, the interest rate will also rise.
Yorkshire’s new 0.78% deal is made up of the Bank of England’s base rate, which is currently 0.10%, plus 0.68 percentage point added on top.
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Ben Merritt, Senior Director of Mortgages at the Yorkshire Building Society, said: “In a truly competitive mortgage market, we are delighted to be able to offer our lowest mortgage rate on record to give borrowers more choice.
“The recent increase in the availability of follow-up mortgages, including the introduction of our first follow-up mortgage in a few years, expands the number of options available to borrowers who, in a low interest rate environment, may wish to take advantage of lower monthly payments.
“As with any variable mortgage that tracks the Bank’s base rate, it is important to ensure that any increase in monthly payments could be allowed, should the base rate increase.”
Borrowers who choose to exit one of the Yorkshire Tracker Mortgages during the initial two-year term will face a 1% prepayment charge.
Eleanor Williams, Financial Expert at Moneyfacts.co.uk, said: “At 0.78%, the two-year 65% LTV (loan-to-value) two-year base rate tracking agreement offers an initial rate. market leader, as well as a fee and free evaluation incentive, and is a welcome addition to an already bustling industry.
She added: “Borrowers who are considering getting a new mortgage should be sure to compare the different options available and make sure they think about the overall and real cost of the whole offer by balancing the initial rate along with any expenses they might incur, such as associated fees, and also consider whether they prefer a variable or fixed mortgage rate.
“Having the support of a qualified counselor could be invaluable in determining which is the best choice for their situation. “