New market-leading mortgage rate launched

Yorkshire Building Society said the two-year tracker rate of 0.78% is available to borrowers with a 35% deposit.

Vicky Shaw
Tuesday 05 October 2021 11:34
Competition to offer mortgage rates below 1% has intensified as Yorkshire Building Society launched a market-leading deal (Joe Giddens/PA)
Competition to offer mortgage rates below 1% has intensified as Yorkshire Building Society launched a market-leading deal (Joe Giddens/PA)

Competition to offer mortgage rates below 1% has intensified as a building society launched a market-leading deal.

Yorkshire Building Society said the two-year tracker rate of 0.78% is available to borrowers with a 35% deposit, and has a £995 fee and free standard valuation.

The mutual has also introduced several other trackers, including a 0.89% tracker rate offered to home buyers or those re-mortgaging with a 25% deposit, which also comes with a £995 fee and free standard valuation.

For borrowers with smaller deposits, a two-year rate of 2.59% is available for those with a 5% deposit.

Tracker mortgages are variable rate deals which tend to track the Bank of England base rate above a certain margin. This means that the interest charged on a mortgage depends on how the base rate changes.

At 0.78%, the two-year base-rate tracker deal at 65% LTV (loan-to-value) provides a market-leading initial rate

Eleanor Williams, Moneyfacts.co.uk

If the base rate falls, the interest rate charged will also fall but if the base rate rises, the interest rate will also increase.

The Yorkshire’s new 0.78% deal is made up of the Bank of England base rate, which is currently 0.10%, plus 0.68 percentage points added on top.

Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “In a really competitive mortgage market, we’re pleased to be able to offer our lowest ever mortgage rate to give borrowers more choice.

“The recent increased availability of tracker mortgages, including the introduction of our first tracker mortgage for some years, expands the number of options available to borrowers who, in a low rate environment, may wish to take advantage of lower monthly payments.

“As with any variable mortgage that tracks the Bank’s base rate, it’s important to make sure any increase in monthly payments could be afforded, should the base rate rise.”

Borrowers who choose to leave any of the Yorkshire’s tracker mortgages during the initial two-year term will face early repayment charges of 1%.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “At 0.78%, the two-year base-rate tracker deal at 65% LTV (loan-to-value) provides a market-leading initial rate, alongside a reasonable fee and a free valuation incentive, and is a welcome addition to an already bustling sector.”

She added: “Borrowers considering securing a new mortgage should ensure that they compare the different options available and ensure that they think about the overall, true cost of the whole package a deal offers by balancing the initial rate against any outgoings they might incur such as associated fees, and also considering whether they prefer a variable or a fixed mortgage rate.

“Having the support of a qualified adviser could be invaluable in calculating what is the best choice for their circumstances.”

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in