Lowest mortgage rate ever hits the market
One of the UK's leading mutual lenders as launched the lowest mortgage rate ever offered. Yorkshire Building Society has announced a new mortgage at just 0.98%, the cheapest nationally available deal to anyone looking to remortgage.
The mutual is one of a number of lenders to have cut mortgage deals recently.
Yorkshire BS launches discount deal at just 0.98%
The new Yorkshire BS 0.98% deal is a discounted rate, and the Daily Telegraph say that it is “the lowest rate ever offered”.
The deal offers a 3.76% discount from Yorkshire's standard variable rate, currently 4.74%. A £1,495 fee is applicable and there is an early repayment charge of 1% during the discounted period. It is available for borrowing of up to £5m.
As it is a discounted product, the interest rate payable will fall or rise in line with the Yorkshire's own borrowing rate, not the Bank of England base rate.
The Telegraph reports that the mutual is one of a number of lenders who have recently cut their rates on high-value mortgages. In October, Barclays cut the cost of borrowing between £1m and £3m by reducing its two-year fixed rate from 1.85% to 1.49%.
Santander has also recently cut its five-year fixed rate for loans of £250,000 to £3m from 2.59% to 2.09%. This deal has no fees and comes with £250 cashback.
Yorkshire undercuts previously available national rate
The previous lowest nationally available rate was HSBCs fixed-rate mortgage at 0.99% for two years.
For buyers, the Yorkshire deal is slightly cheaper than the HSBC one. However, it does not offer a 'remortgage package' of free valuation and free legals which could add several hundred pounds to the overall cost of remortgaging.
Financial analyst Moneyfacts says that the average two-year fixed-rate mortgage deal is now just 2.34%, a reduction of 0.33% from the same time last year.
Mortgage expert David Hollingworth suggested that a fixed rate may be more appealing to large loan borrowers than the Yorkshire BS product. He says: "You've got to be careful not to be purely drawn to the fee, and you also have to keep in mind that this is linked to standard variable rate.
"There's potential that of course a variable rate could come down further, but you are still relying on the lender to cut their standard variable rate in line with the bank rate. The upside of having a variable rate is relatively small when you can fix at essentially the same level."