Yorkshire Building Society has launched a two-year fixed rate mortgage under 2% aimed at first-time buyers.
The Society is offering a two-year fix at an interest rate of 1.98% rate for buyers with a 10% deposit. The mortgage has a £1,345 product fee.
Consumer website Moneyfacts said it was the lowest fixed rate mortgage on the market available to borrowers with a 10% deposit it has seen since its records began.
For those looking for a lower fee there is a 2.59% rate at 90% loan-to-value, which has no product fee with free standard legal work for those remortgaging or £250 cashback on completion for those buying a new home.
Borrowers with a 10% deposit can also benefit from a five-year fixed rate at 2.93%, also with a £1,345 product fee.
Rachel Springall, Finance Expert at Moneyfacts, said: “It’s fantastic to see Yorkshire Building Society support first-time buyers by offering a competitively priced deal for those with a 10% deposit. It can be a great hardship trying to get onto the property ladder so finding a cost-effective deal to reduce monthly mortgage payments is essential.
“Borrowers must always work out the true cost on their mortgage deal and raise enough cash to cover all their upfront fees, such as legal costs or a product fee.”
HSBC has launched a two-year fix at an interest rate of 0.99%. While a lower rate than TSB’s two-year fix, it has a £1,499 product fee.
Tashema Jackson, money expert at uSwitch.com, said: “Competition in the mortgage market is hotting up with the first fixed rate sub-1% deal now available. While this headline grabbing mortgage rate will be attractive to many home buyers, only those with a hefty 35% deposit will be able to take advantage of this record low rate – shutting the door on most borrowers.
“People should look beyond headline rates and consider their own personal circumstances when looking for a mortgage deal. Many of the lowest rates carry very high fees and may not actually work out cheaper in the long run. For some borrowers a two year fixed mortgage will not provide enough stability and a five or ten year fixed deal might be the better option.”
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Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
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