Mortgages  

YBS and Chelsea cut rates on 95% LTV range

Both Yorkshire Building Society and its subsidiary Chelsea Building Society have both cut rates on their ranges of 95 per cent LTV mortgages as part of a commitment to getting people on the housing ladder.

After a cut of 0.25 of a percentage point on its highest LTV range, rates available include: a 4.74 per cent two-year fixed rate with £845 product fee; a 5.29 per cent two-year fixed rate, including £250 cashback and free standard valuation; a 5.39 per cent five-year fix with £845 fee; and a 5.59 per cent five-year fixed rate with £250 cashback and free standard valuation. The equivalent offset products are 0.2 of a percentage point higher.

YBS also includes 95 per cent LTV loans for first time buyers only. These include a repayment mortgage at 4.99 per cent for a two-year fix and an offset loan at 5.19 per cent for a two-year fixed rate.

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CBS’s range of 95 per cent loans includes a 4.64 per cent two-year fixed rate with a product fee of £1,545; a 5.49 per cent two-year fix; a 5.59 per cent five-year fix including £250 cashback and free standard valuation; a 5.79 per cent five-year fixed rate with £250 cashback and free standard valuation; and a two-year fixed rate 5.29 per cent including £250 cashback and free standard valuation.

The two first-time buyers’ loans are the same as YBS’s, and the offset equivalent is 0.2 of a percentage point higher.

Provider view

Tanya Jackson, head of corporate affairs at YBS, said: “We provide one in three of our mortgages to first-time buyers, and as a mutual organisation one of our priorities is to help people become homeowners.

“A big barrier to this can be gaining a large enough deposit, which is why we offer a wide range of competitive 95 per cent mortgages.”

Adviser view

Daniel Bailey, Derbyshire-based mortgage adviser at Middleton Finance, said: “This is positive news for those at the end of the market with only small deposits. Everyone else has benefited from rates coming down, and it is time that those with small deposits or little equity in their properties had a share.

“It may help to benefit those who are called ‘mortgage prisoners’ – people trapped in a home with little equity and perhaps paying an unattractive rate.”

Mr Bailey added: “It is good to see first-time buyers getting a more attractive rate for 95 per cent loans. I tell clients that Help to Buy may not be the right route for everyone. They may not be comfortable with borrowing money from the government.”

Charges

£845 product fee on part of range.

Verdict

Any help for the hard-pressed first-time buyer is welcome. So the prospect of only having to stump up a deposit of 5 per cent – rather than the more usual 20 per cent – is welcome. The cashback and free standard valuation on some loans in this range are also good news, as cash is always tight just after buying one’s first home.