For the second time this month, Yorkshire building society has reduced the rates on its two and five-year fixed-rate mortgages – dropping its five-year fixed rate to below 3.5%.
Increased confidence that the Bank of England is likely to hold interest rates where they are into next year has made mortgage lenders bold, giving them an incentive to lower their rates and become more competitive.
Yorkshire’s five-year fixed rate mortgage, available up to 75% LTV, now sports a rate of just 3.49%, down from 3.89%. The building society’s two-year fixed rate mortgage, also available up to 75% LTV, now offers a 2.59% rate, down from 2.89%.
Both mortgages, however, come with a £995 fee. This upfront payment may prove a barrier to some borrowers, which is why Yorkshire is is giving customers the option of paying a reduced fee of £95 and getting £250 cashback if they choose the same two-year and five-year fixed rate mortgages at 2.79% and 3.69% respectively.
Group direct mortgage manager at Yorkshire Building Society, Chris Smith, commented, “The fixed rate deals are particularly attractive and have been introduced in response to demand from borrowers wanting the security of fixing the same regular monthly mortgage repayment, at a time when their household budget continues to be squeezed.”
Moneyhighstreet comments: “We’re impressed by how far and how fast lenders are dropping the interest rates on their top mortgage deals.
“This level of competition in the market is great for borrowers – and the temptation to fix your mortgage repayments while the interest rate is at its record low is strong, which may lead to increased property sales in the coming months.
“Choosing a fixed-rate mortgage will also help households plan their budgets better and make savings at a time when inflation is putting growing pressure on everyday expenses.”