The Yorkshire Building Society has launched two new discounted Standard Variable Rate deals.
The mortgages, which are new to the Yorkshire product range, are variable rates that track the lender’s Standard Variable Rate (SVR), currently at 4.74%, at a discounted rate.
Available at 65% loan to value (LTV) is a two-year discounted SVR mortgage at 1.15%, based on an SVR discount of 3.59%. Borrowers with a 25% deposit can choose for a 1.23% rate, based on an SVR discount of 3.51%, over a two-year period.
Both mortgages are available to house purchase and remortgage customers and come with an £845 fee.
The mortgages have an interest rate collar of 0.00% allowing the customer to benefit from reductions to the lenders SVR until their interest rate payable reaches the collar. After the initial term the mortgage rates will revert to Yorkshire’s Standard Variable Rate.
Borrowers can redeem their mortgage at any time during the discounted period and will only incur a 1% early repayment charge (ERC), which is lower than that of the Yorkshires typical fixed rate ERCs.
Also each home loan is portable, meaning customers can transfer their mortgage to a new property without charge.
Brendan Gilligan, mortgage product manager at Yorkshire Building Society, said: “Many borrowers continue to keep an eye on interest rates, and want to make the most of the low base rate environment.
“However, swap rates – upon which fixed rate mortgages are priced – have fallen so much recently that they are becoming cheaper to price than tracker mortgages.
“A discounted SVR product allows us to offer a competitive rate for those who want to keep repayments as low as possible but who understand they may go up or down in future.
“These new mortgages have the lowest rates we currently offer so they may appeal to borrowers looking for the lowest possible monthly repayments over a short period. However the rate is variable, meaning it could rise as well as fall, so customers should factor this into their budget.”