Yorkshire Building Society has become the latest lender to launch a 25-year fixed rate mortgage.
The lender will be launching two new 25-year fixed rate products with rates of 6.29 per cent and 6.49 per cent, available from August 15.
This comes just after both Halifax and London & Country announced the launch of 25-year fixed rate mortgages.
L&C product has no early repayment charges at any time. The rate is fixed at 5.99 per cent for any term of up to a maximum of 30 years. The deal is available for both purchases and carries an arrangement fee of 2 per cent. Borrowers will then receive a 2 per cent loyalty bonus in year 10 and again in year 20.
The Government recently announced its intention to try and boost the supply of longer-term fixed rate mortgages.
YBS’s 6.29 per cent product includes ERC’s of 3 per cent for the first 10 years, whilst its 6.49 per cent option has ERC’s of 3 per cent for the first five years.
YBS claims it has seen a significant increase in sales of five and 10 year fixed rates over the last year and these new products will help the lender to test customer appetite for longer-term deals. Funding for the new products is however limited and therefore early applications are recommended.
Yorkshire’s chief executive Iain Cornish says: “Our new products support the Chancellor’s desire to boost the supply, and take up, of long term fixed rate loans whilst giving customers real choices when considering these products. Whilst our 25 year fixed rate mortgages are available for both house purchase and re-mortgages, these products are particularly good for first time buyers. They shouldn’t be put off by the longevity of the loan, the mortgage is fixed for 25 years but it’s portable and can move home as often as the customers want to. The one thing that is almost guaranteed for first time buyers is that they will have a mortgage for the next 25 years!”