Mortgages  

Skipton lowers residential mortgage rates

Skipton Building Society has made cuts of up to 0.45 of a percentage point on its range of two- and five-year fixed-rate residential mortgages at varying LTV levels.

Highlights of the purchase products in the revised range include a two-year fix priced at 1.55 per cent at 60 per cent LTV with a £995 product fee.

The revised range for remortgagers include a two-year fix at 2.54 per cent at 90 per cent LTV with a £995 product fee, and a fee-free five-year fix at 3.53 per cent to 90 per cent LTV.

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In addition, the provider has also added a new range of base rate trackers to its portfolio with loan-to-value ranging from 60 per cent to 90 per cent.

The range includes a two-year tracker priced at 1.49 per cent at 60 per cent LTV with a £995 product fee.

Provider view

Kris Brewster, Skipton’s head of products, said: “We are pleased to be able to lower rates across a range of short-term and longer-term fixed mortgages as well as introducing our new base rate tracker products. We continue to offer fee and rate options to suit a number of different borrower requirements.

“Our mortgage products continue to have an emphasis on offering wide choice and good value, along with our commitment to doing everything to help borrowers.”

Adviser view

Matthew Harris, director of Fife-based Dalbeath Financial Planning, said: “The suitability of deals with low interest rates but with relatively high product fees depends on the size of the loan. For those who are looking to borrow below £250,000, it might be worth paying a higher rate of interest to avoid paying a product fee.

“We do not know when the Bank of England is going to increase base rates but it is very likely that they will do so at some point this year. Most clients want certainty in the rate of interest for planning purposes, so I would say that fixes would continue to be the best option for many.

“I think we will see the continuation of competition in the market this year. A rise in interest rates will obviously have a big impact on the market, and the European Mortgage Credit Directive will have a huge impact on the buy-to-let market in particular.”

Charges

The aforementioned product ranges from fee-free to £995.

Verdict

Skipton has displayed an appetite to continue the price war which ran rampant in 2015 – particularly during the summer months – into the new year. Although not market-leading, the two-year fix is certainly competitive. However, what is perhaps more interesting is the addition of a tracker equivalent, boasting a slightly lower rate of interest. Although the oft-predicted hike in base rates did not materialise in 2015, the Bank of England is likely to follow the example of the Fed and increase rates this year. Fixes are likely to appeal to borrowers who meticulously plan their finances, and while the cheaper rate offered by trackers might tempt borrowers, a seemingly impending rate rise makes the products somewhat less desirable.