The Yorkshire Building Society is the latest to join in with the mortgage rate price war, introducing its best product yet with a two-year fixed deal at 1.18%. However, it will require a significant 35% deposit and is also qualified by the product and processing fee of £1499 attached to the deal.
Mike Regnier, the chief commercial officer at Yorkshire Building Society said of the announcement: ìWe pride ourselves in doing everything we can to help people buy the home they want, as reflected by now offering our lowest ever mortgage rate. This new mortgage forms part of our wide range across the YBS Group which seeks to support borrowers of all types.î
It has been seen by many experts as a direct response to the two-year fixed mortgage deal unveiled by HSBC in the last few weeks which is at 1.19%. This contract requires a hefty 40% deposit and the same fee of £1499. Thus for those customers looking to benefit from this ongoing mortgage price war, it is essential they evaluate all the deals available on the market to ensure they get the one best for them.
A spokesperson for London and Country Mortgages, David Hollingworth, commented on the dynamic in the mortgage market: ìThe appetite of lenders at the moment is forcing strong competition in the market and that is driving rates in a seemingly ever downward direction. This rate cut is clearly designed to pip the competition and claim the title of lowest rate on the market by the slimmest of margins.î
He went on to state: ìThatís great news for borrowers and although thereís still the possibility of more price moves, borrowers should be careful not to freeze. Paying a substantially higher standard variable rate for a couple more months is likely to cost a lot more than chipping a fraction off a new mortgage rate.î
Further to this, the Norwich and Peterborough Building Society has recently introduced two competitive deals to the market. The first is a 65% loan-value two-year fixed rate mortgage at 1.94%. The second is a 90% loan-two-value on a similar two-year deal mortgage but at 3.39%. They are available to both remortgage customers and those looking to buy a house.
This news is just another example in a long line illustrating an ongoing war between mortgage lenders as to who can offer the best deal. It is further exemplified by the fact that in April 2012 the average five-year fixed rate on a 25% deposit was at 4.29%. At present there are deals of this length at 2.19% and ten-year deals offered at 3% and below.