Yorkshire Building Society has launched a new two-year mortgage product fixed at 4.49 per cent for borrowers with a 5 per cent deposit.
Coming with a £845 product fee, the loan is aimed at helping those looking to get on to and move up the property ladder.
The Bradford-based mutual has also unveiled a new two-year 1.59 per cent fixed-rate mortgage at 65 per cent LTV with a £345 product fee.
It currently offers a two-year loan fixed at 1.29 per cent for customers with a 35 per cent deposit, with a £845 product fee.
In addition, the society has announced new two-year and three-year, loans fixed at 1.54 per cent and 2.24 per cent respectively, of up to 75 per cent LTV. A £845 product fee is applicable to both loans.
YBS has also launched a new range with up to 0.35 percentage point reductions available to borrowers with a 25 per cent deposit.
Three-year fixed-rate loans have been reduced by this figure to 2.24 per cent, while five-year fixed-rate mortgages have been cut to 2.79 per cent – both with a product fee of £845.
These announcements come just over a week since YBS unveiled new two-year and five-year fixed rate remortgages at 1.64 and 3.19 per cent respectively, with a £345 product fee.
Both products include free standard valuation and legal services, while the five-year fixed offering comes with a £500 cashback on completion.
Yorkshire Building Society Group has 230 branches, 97 agencies, and assets of £35.9 bn. Its 4,500 employees serve 3.4m customers.
Ranging from £345 to £845
Jemma Anderson, mortgage product manager at Yorkshire Building Society, said: “As a mutual society with customer-centred values, offering our members competitive mortgages with a high level of customer service is important to us. We’re very proud to be able to offer customers with a 35 per cent deposit at 1.29 per cent rate with a competitive product fee, and believe these new rate reductions across the range will prove popular with a wide range of borrowers, with the 95 per cent reductions helping more first-time buyers take that crucial initial step on the property ladder.”
John Stirling, chartered financial planner at Walden Capital, based in Essex said: “It is very good news. The market has seen a fall in fixed rates with smaller deposits. The market for high loan-to-value mortgages disappeared in 2008, and only came back in 2010/11 with extremely high interest rates.
“Without first-time buyers coming into the market it is difficult to see the property market sustaining its current position. Help-to-buy has helped first-time buyers on to the property ladder, but this is not enough on its own. We need lenders to provide products for low deposits with competitive fixed rates.”
High loan-to-value mortgages have made a welcome return from exile, and have helped many to get their first properties. There have been reductions in rates across the market, which is good news for consumers. However, with a base rate rise expected later this year or early next year, consumers might benefit more from a longer-term loan fixed at a slightly higher rate.