The Yorkshire Building Society has stated that variable mortgages are still proving popular among borrowers despite the Bank Rate rise last week.
Since the Bank of England announced that the Bank Rate would increase to 0.5%, the mutual has seen a 3% rise in the number of customers reserving a two year discounted standard variable rate (SVR) mortgage.
Throughout October the Yorkshire had recorded a daily average of 3% of its mortgage customers choosing one of its discounted SVR mortgages, but this figure increased to a daily average of 6% during the first week of November.
Mike Sims, senior mortgage manager at Yorkshire Building Society, said: “It’s interesting that some borrowers are still keen to secure a variable mortgage despite the first Bank Rate increase in a decade being announced.
“Borrowers clearly value the opportunity to keep monthly repayments down over certainty of how much they will pay and appear confident that the Bank of England won’t increase rates at pace during the initial term of their mortgage.”
The Yorkshire currently has the lowest ever two year discounted SVR mortgage at 0.87%, for customers borrowing up to 65% loan to value (LTV) of their property. This mortgage comes with a £1,495 fee.
The 0.87% variable rate is based on a discount of 3.87% on the Yorkshire’s SVR (currently 4.74% but rising to 4.99% in December) which will apply for the first two years of the mortgage term.
Sims added: “Even with the planned increase to our SVR in December, our discounted SVR mortgage would still be a very attractive rate to borrowers who wish to benefit from the current low interest rate environment.”