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Product matters

Yorkshire Building Society&#39s 5.44 per cent 10-year flexible fix is not the cheapest rate in the 10-year fixed-rate market but it does offer the best value for anyone wanting a long-term fix.

The longer the term of a deal, the more important it is that it offers maximum flexibility and Yorkshire scores well.

A key benefit with all Yorkshire&#39s mortgages is that as well as being on daily interest and flexible, with no compulsory insurance, they allow unlimited penalty-free part-repayments, with the early redemption charges only applied on full redemption. Any overpayments can, however, only be used to take payment holidays or underpayments, which is the only shortcoming, in that drawdowns are not allowed. But a further advance facility is available up to 75 per cent LTV on, effectively, a choice of rates available at the time.

I do not expect to be knocked down in the rush for this mortgage despite a cashback of up to £500. It has strong competition from Bank of Ireland with a non-flexible seven-year fix at 4.99 per cent and several five-year fixes, including Woolwich&#39s flexible 4.99 per cent and the psyche of the British mortgage buyer is focused on shorter-term deals with lower headline rates.

Despite Yorkshire&#39s generous policy on partial early repayments, borrowers have become less worried about sharp upward interest rate movements and see less need to protect themselves from that possibility. SWAP rates have fallen by nearly 0.2 per cent since this mortgage was priced and if they fall enough to allow a reprice below the 5 per cent level, the mortgage will sell well.

Ray Boulger is a senior technical manager at Charcol


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