Yorkshire Building Society launches market-leading 0.99% mortgage
YORKSHIRE Building Society is launching a 0.99 per cent mortgage - the lowest rate on the market.
The two-year deal will be available from tomorrow, for both home buyers and people looking to re-mortgage.
It is the first time the building society, which is the second biggest building society in the UK after Nationwide, has offered a fixed rate mortgage of less than 1 per cent.
Financial website Moneyfacts.co.uk said the rate is the lowest fixed-rate currently on the market for the two-year period.
Borrowers wanting to take out the mortgage will need to stump up a £1,495 fee and they will also need to have a 40 per cent deposit.
Yorkshire’s new deal isn't the only sub-1 per cent fixed-rate to have appeared on the market in recent months.
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Rachel Springall, a finance expert at Moneyfacts, said an 18-month fixed-rate deal from Santander at 0.99 per cent was withdrawn from the market in February.
HSBC also had a two-year fix at 0.99 per cent which was withdrawn from the market in December.
Is it any good?
Springall said: "It's clear to see that there is still some fierce competition in the mortgage market, which will be music to the ears of borrowers hoping to secure a low fixed rate for over the next few years."
She said that with any mortgage deal, it is important for borrowers to work out the overall cost, including any fees, to see if it is the best possible choice for them.
The 40 per cent deposit requirement may also be unattainable for many. On a £250,000 house, that’s a huge £100,000 deposit needed.
Recent data revealed that the average mortgage deposit for first-time buyers is just 17 per cent.
How to get help buying a house
THERE are several government schemes available to help you get onto the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a 10 per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties.
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