Skipton Building Society is offering a bespoke range of mortgages with low rates starting at 3.35% for existing borrowers who may be stretched by new remortgage rates.
The deals are for those customers who have reached the end of their current deal but fear they may struggle to pay the high rates on offer in today’s current market when they switch.
The lowest rate on offer as part of the new range is 3.35%, which is for a two-year fixed rate for someone who needs to borrow up to 60% of their property’s value – in other words 60% loan-to-value (LTV).
But there are also deals for those with higher LTVs, including a deal for those with 90% LTV which has a rate of 3.59%.
Mortgage brokers are describing the deal as ‘unprecedented’ since, currently, the average rate for a two-year fixed rate mortgage is 6.41% according to Moneyfacts.co.uk.
The lowest rates on offer, up until now, have been just below 5% for a five-year fix.
However, Skipton’s new deals have fee of 5% attached, and because of this, those looking to switch to these deals are being urged to seek advice before signing up.
Indeed, Stephen Perkins, managing director at Yellow Brick Mortgages, welcomed the move by Skipton but he urged anyone considering the deal to check their numbers first.
He said: “This is a very innovative move by Skipton to effectively allow their existing clients to capitalise some of their interest in exchange for lower monthly payments, which will also increase their client retention and reduce risk of arrears.
“However, borrowers need to weigh up the overall cost of the product against their personal priorities.”
Skipton said the new range would help those borrowers who need greater financial support to benefit from lower rates and monthly repayments. The fee, which is 5% of the existing loan, can be added to the mortgage balance.
