Yorkshire Building Society has shot to the top of the mortgage ‘best buy’ tables with its new two-year fixed rate deal priced at a cracking 1.99%.
A rate this cheap against what’s probably the biggest loan of your life is not to be sniffed at, so don’t waste a second in finding out if it’s the deal for you. We have the details…
What’s the deal?
Yorkshire Building Society is offering a market- leading fixed rate mortgage priced at the hugely competitive fixed rate of 1.99% until March 31, 2015.
The deal is open to first and next-time buyers, as well as those looking to remortgage their existing property.
Once the stated period is up, the mortgage reverts to Yorkshire’s Standard Variable Rate (SVR). This currently stands at 4.99%, though it may have changed by then.
The deal comes with set-up fees of £995 which are fairly typical for the mortgage market.In return for the cheap rate, you will be tied in for the duration of the deal. If you redeem the mortgage any time before then, you will face early repayment charges of 3% of the outstanding loan.
You can, however, overpay on the mortgage by up to 10% of the outstanding loan a year without incurring a charge.
If you have savings you want to put to good use, the Yorkshire is also offering an equivalent offset option available at 2.19% for the same deposit and fee.
Yorkshire Building Society’s product manager, Richard Barker, said: “As a mutual, our aim is to support all types of home buyers and homeowners – so we are pleased to be able to offer such competitive rates to purchasers with a larger deposit or homeowners looking to save money by remortgaging.”
To be eligible for Yorkshire’s mortgage you’ll need to be able to produce a fat deposit of 40%, so clearly it isn’t going to be an option for everyone.
As mentioned, it also comes with a fee of £995. However, this is less than half of the £1,999 charged by HSBC’s equivalent 1.99% two-year fix (until April 2015) - which is what makes Yorkshire’s deal market leading.
And if you are lucky enough to find yourself in a position to pay the mortgage off before the end of the term you’ll be charged an early redemption fee of 3%.
What’s the verdict?
While the length of the tie-ins match the length of the deal, it’s unlikely you will want to move away from such a great rate anyway.
For example, if you are sitting on the average SVR of 4.35% (according to the Bank of England), you would be paying £1,095 a month on a £200,000 repayment mortgage taken over 25 years.
But switching this deal to the Yorkshire’s 1.99% fix would see your payment on the same mortgage plummet to £847 a month – a saving of nearly £250 a month!
Savings of course, will be even great for larger loans.
In short, for anyone with a 40% deposit, this is a fantastic deal and certainly something you shouldn’t allow to pass you by.
There is also no certainty as to how long these record-cheap mortgages will be around – so snap them up while you still can!
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.