Yorkshire Building Society has launched a range of products targeted at borrowers nearing the end of their Help to Buy mortgage.
Branded the ‘Next Step’ range, the mortgages are available on two and five-year fixed rates and offer incentives such as £150 cashback, free standard valuation and legal fees.
They are targeted at members of the government-backed Help to Buy Equity Loan scheme, which offers borrowers a loan of up to 20 per cent of the cost of a new-build home interest-free for the first five years.
After that, borrowers are charged interest of 1.75 per cent on the outstanding loan amount, which increases each year with inflation.
The Yorkshire is offering savers coming to the end of their term a two-year fixed rate mortgage at 2.05 per cent at 90 per cent loan-to-value (LTV) to refinance their property. This comes with a £495 product fee.
For borrowers with bigger deposits it is offering a two-year fixed rate at 1.77 per cent, at 75 per cent LTV and with a £995 fee.
Five-year fixed rates are also available at 2.24 per cent at 75 per cent LTV with a £995 fee, and 2.69 per cent at 90 per cent LTV with a £495 fee.
Janice Barber, mortgage manager at Yorkshire Building Society, said it was important for borrowers to review their options as they come to the end of their interest-free years on the equity loan.
She said: "Paying off the Help to Buy equity loan could save homeowners from paying additional interest and management fees, and remortgaging could ensure they benefit fully from any future equity in their property.
"Our Next Step mortgage range provides borrowers with an alternative option to consider when refinancing their property, and we would encourage Help to Buy borrowers nearing the end of their initial deal term to speak to one of our mortgage advisers for more information."
The equity loan scheme is due to end in 2021 but last week the government faced calls from the Intermediary Mortgage Lenders Association (IMLA) to clarify its future to prevent a "destabilisation" of the housing market.