Yorkshire Building Society has launched a 0.99% two-year mortgage, its lowest ever fixed rate product.
It is available to remortgage and home purchase customers with a 40% deposit and comes with a £1,495 fee.
Lower fee and fee-free mortgages suitable for those borrowing less,or who wish to keep up-front costs down are also available from the society.
The rate matches Santander’s 18-month fixed rate deal at 0.99% which was launched in February.
Last year, HSBC also had a 0.99% two-year fix which was withdrawn in December.
James Farrow, Yorkshire Building Society senior mortgage Manager, said: “We have seen fixed mortgage rates creep up gradually in recent months so seeing it fall to 0.99% is very welcome news for borrowers.
“We always seek to keep the cost of borrowing as low as possible and offering the lowest fixed rate mortgage in our 152-year history clearly reflects that.”
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “This brand new market-leading two-year fixed mortgage from Yorkshire Building Society is likely to delight borrowers hoping to take advantage of a competitive fixed rate with a trusted brand.
“It also has some flexibility by allowing overpayments and borrowers would be wise to take full advantage of this to reduce the mortgage term. As with any deal, it’s important that borrowers work out the overall true cost to see if it’s the best possible choice for them.”
David Hollingworth, mortgage expert at L&C Mortgages, said: “This is the lowest rate on the market at the moment and cutting the rate below 1% is a substantial shift – the next best rate on offer is currently a Halifax product for first time buyers only at 1.09% to 60% LTV with a £999 fee.
“This news from Yorkshire Building Society underlines just how competitive the current market is, but it’s vital that borrowers continue to factor in fees to determine the overall cost. This rate is astonishingly low and on par with the lowest ever – but the fee is £1495 and there’s no help with other set up costs like valuation.
“It therefore may not be the right deal for everyone but again highlights just how low fixed rates are at the moment and that doesn’t look like it’s about to change with the Bank holding base rate at 0.25% yesterday.”
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