Mortgages  

Yorkshire targets FTBs with new fixed-rate mortgages

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.

Article continues after advert

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.

Charges

Ranging from £345 to £845

Provider view

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.”

Adviser view

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.”

Verdict

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.