Yorkshire is set to launch the lowest 95 per cent loan-to-value mortgage currently on the market – but it will not be available via intermediaries.
The two-year fixed rate mortgage at 3.25 per cent will be available from tomorrow (19 May) to homebuyers with smaller deposits, and it includes a £995 product fee plus £250 cashback on completion.
Moneyfacts has confirmed it will be the lowest 95 per cent LTV home loan on the market without a local area restriction.
The building society is also offering a 1.97 per cent two-year fixed rate to remortgage and home purchase customers with a 10 per cent deposit, which comes with a £995 product fee and £250 cashback on completion.
Yorkshire’s latest move follows the launch of the lowest-ever mortgage rate of 0.89 per cent – a two-year discounted standard variable rate (SVR) deal available to anyone seeking to borrow up to 65 per cent of the value of their property.
The 0.89 per cent mortgage is also only available directly from the lender.
Charles Mungroo, mortgage product manager at Yorkshire Building Society, said: “It’s been the season for record low mortgage rates, however the focus has mainly been on borrowers with larger deposits.
“We’re committed to providing our customers with a home of their own and believe it’s important to offer competitive home loan options to suit a range of borrowing needs.
“We hope our latest rate reductions appeal to those with smaller deposits or equity amounts and the cashback offer will help to reduce the upfront costs of buying a home.”
But Matthew Fleming-Duffy, director at Bournemouth-based Cherry Finance, said: “I do find this frustrating. We had a problem with a lot of lenders a few years ago running a dual-pricing mechanism, which does not represent any fairness for consumers.
“This is not evidence of dual pricing, but to be really practical, if you lived in Yorkshire and saw the advert or you already banked with YBS, you might be inclined to think ‘that is a brilliant deal’.
“If you came to a broker, we could talk to you about the Family Building Society, with a similar deal at 2.69 per cent, or the Marsden at 2.79 per cent, or Barclays at 2.79 per cent, and so on.”
Mr Fleming-Duffy added that there were ‘stackloads’ of lenders with better products and suggested those that do not go through intermediaries do not want to be open to scrutiny.
“That is a problem for the wider market and I wish the regulator would get involved with it,” he said.
simon.allin@ft.com
