YORKSHIRE BUILDING SOCIETY LAUNCHES RECORD LOW 0.89% MORTGAGE RATE

Britain’s lowest-ever mortgage rate has been launched, priced at 0.89% for two years.

There were predictions a few months ago that the era of record-low mortgages may be coming to an end, but the new move by the Yorkshire Building Society suggests that, if anything, competition in the home loans market may be intensifying. The previous lowest rate was 0.98%.

The Yorkshire’s claim to be offering an “all-time low” rate was verified by the financial data provider Moneyfacts, but is not fixed. It is pegged to the society’s standard variable rate (SVR), offering a discount for two years, so it is not for homebuyers looking for the certainty of fixed monthly payments.

The deal is also restricted to people needing to borrow no more than 65% of the value of their property and who are happy to pay a fee of £1,495.

There are new entrants in the mortgage lending market, with Sainsbury’s Bank returning this month after a 13-year absence. A deal from the challenger bank Atom described by some as the UK’s best-ever home loan – a five-year fixed-rate mortgage priced at 1.29% – attracted huge interest but was pulled on Wednesday evening after being available for just a week.

A spokesman for the Yorkshire, which announced in January that it was shutting 48 branches, said: “We are very pleased to offer borrowers the lowest mortgage rate ever available. The cost of funding has fallen in recent weeks and, as a financially strong building society with no external shareholders to satisfy, we have the ability to pass this on to borrowers.”

The launch coincided with new data from the Council of Mortgage Lenders showing that gross mortgage lending totalled £21.4bn in March, up 19% on February’s total of £17.9bn but lower than the figure for March 2016.

Mohammad Jamei, the CML’s senior economist, said there had been a shift in lending towards first-time buyer and remortgage customers in recent months, and away from home movers and buy-to-let landlords.

He added that the general election in June was not expected to have a marked effect on the mortgage market.

Via: https://www.theguardian.com/money/2017/apr/21/yorkshire-building-society-launches-record-low-uk-mortgage-rate

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