Britain’s mortgage price war is reignited today with the launch of a record low homeloan deal
Yorkshire Building Society is offering a rate of 0.89 per cent the loan to buyers and people looking to remortgage – but they will need to have a deposit of at least 35 per cent.
The two-year standard variable rate (SVR) mortgage is being offered at a discounted rate of 3.85 per cent and when the two-year period is up the rate goes up to the Yorkshire’s SVR, which is currently 4.74 per cent.
However, because the rate is variable, the 0.89 per cent could also go down even further.
Financial information website Moneyfacts said the interest rate is the lowest on its records, which go back to 1988.
Jonathan Harris, director of mortgage broker Anderson Harris, said: “The discounted rate is market-leading and will appeal to those looking for a cheap variable-rate mortgage as opposed to a fixed rate.
“Given that the lender already offered the cheapest deal in this space, it clearly hasn’t done as much business as it wanted to, which is why it is reducing it ever lower. “
Yorkshire Building Society is offering a rate of 0.89 per cent
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The debt market is over-supplied and when supply outstrips demand the simple economics is that mortgages become cheaper.
When supply outstrips demand the simple economics is that mortgages become cheaper
“This is what we are seeing with lenders having to lend – even at these rock-bottom rates they are still making some money, particularly those with access to deposits. It is great news for the borrower.
‘The message is the same from all lenders – none are overly happy with the volume of business they are doing and want to do more.
“If the General Election results in people putting decisions to buy on hold then we could see even more competitive deals in an effort to attract business.
he building society said it is also making interest rate reductions
“This move comes on the back of Atom Bank’s decision to offer five-year fixes at two-year rates – those rates aren’t sustainable indefinitely and indeed lasted just a week, but sometimes it is about getting out there while others sit and ponder.”
Borrowers wanting to take out the 0.89 per cent deal will also need to stump up a product fee of £1,495, or alternatively they could opt to pay a lower fee of £995 and have a higher mortgage rate of 1.05 per cent.
In March, YBS launched a 0.99 per cent two-year fixed-rate deal for borrowers with a 40 per cent deposit.
The building society said it is also making interest rate reductions of up to 0.16 per cent on some new mortgages for borrowers with deposits of between 15 per cent to 35 per cent, as well as introducing new cashback options on home loans.