MORTGAGE RATE WAR: New 0.99 per cent deal gives boost to home buyers as market shakes up
MORTGAGE borrowers are set to benefit from lower repayment costs after a spate of lenders dropped mortgage rates due to increased competition for customers.
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Yorkshire Building Society has today launched a market-leading 0.99 per cent two-year fixed-rate for owners with equity of at least 40 per cent - or 60 per cent Loan to Value (LTV).
It is the first time the provider has offered a rate below one per cent and is currently the only such deal on the market.
However, the mortgage comes with a relatively high fee of £1,495, highlighting the importance for borrowers to calculate overall cost of a loan including repayment costs and added fees.
At the same time, HSBC has dropped the rate of its five-year fixed rate mortgage to 1.94 per cent for borrowers with a deposit of 25 per cent - 75 per cent LTV, which comes with a fee of £999.
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It comes after West Brom Building Society cut rates on its five-year 65 per cent LTV deal to 1.99 per cent, which is fee-free.
The cuts are welcome news for borrowers, after rates have gradually crept up in recent months.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “With any deal, it’s important that borrowers work out the overall true cost to see if it’s the best possible choice for them."
James Farrow, Yorkshire Building Society senior mortgage manager, said: “We always seek to keep the cost of borrowing as low as possible and offering the lowest fixed rate mortgage in our 152-year history clearly reflects that.”