The lowest ever mortgage rate, priced at 0.89% for two years, was launched last month.
Mortgage rates seem to be getting lower and lower and many predicted we’d soon see the end of the record low mortgage deals, however, Yorkshire Building Society has recently taken the record to an all-time low.
In early April, Atom Bank launched a 1.29% fixed five year deal - dubbed ‘the UKs best ever home loan’ - but due to its huge popularity it was removed from the market.
Shortly after Atom Bank pulled this offer, the Yorkshire Building Society introduced its record breaking mortgage deal at 0.89%, with many expecting other lenders to launch similar deals as competition. This two year discounted standard variable rate mortgage is restricted to people looking to borrow up to 65% of the property’s value and also comes with a £1,495 product fee.
A Yorkshire Building Society spokesman stated “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.”
Financial advice site Moneyfacts.co.uk has revealed that the average home borrower is currently paying £276 less when compared to this time last year and mortgage rates currently sit at their lowest in the last 29 years since records began.
Finance expert at MoneyFacts, Rachel Springhall commented “It’s fantastic to see such low rates on offer. Those looking for more flexibility over the shorter term may prefer a discounted deal, but those looking for some security could choose a fixed rate,”
Borrowers are being advised to be cautious when considering these new low mortgage offers and urged to read all the small print as some are coupled with quite large fees, however, experts believe this trend will continue and that we could see rates fall as low as 0.5%.
Martin Stewart of mortgage brokers London Money, also commented on the current state of mortgage products, he said “Lenders are fighting fiercely to get more customers on to their books and that’s why they are offering these ludicrously low mortgages at the moment”
Stewart added “Nearly all of them are behind on their lending targets and so they think they will attract more borrowers by slashing their rates. This is going to continue for the foreseeable future”
