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Skipton 95% mortgage deal spurs competition

Hollingworth: ‘Positive move’
Hollingworth: ‘Positive move’

Skipton Building Society has launched a 95 per cent loan to value mortgage to direct customers, with other deals at 90 per cent LTV available through its subsidiaries Pink Home Loans and estate agency Connells.

The 95 per cent deal is one of a range of new products which launched on May 17, offering discounts for existing Skipton customers and their families.

The direct-only deal, available between 85 and 95 per cent LTV, is fixed for two years at 4.99-6.99 per cent for existing customers or 5.19-7.19 per cent for new clients.

The offering has a £995 product fee, a 3 per cent early repayment charge and a maximum loan size of £1m or £250,000 for first-time buyers. Other features include fee-free overpayments of up to 10 per cent of the property value.

The Pink intermediary deals include a three-year fixed rate at 6.59 per cent at up to 90 per cent LTV with a £995 fee.

Skipton products controller Richard Andrews says: “When we announced our strong 2009 results, we said we hoped to gradually increase both the volume and scope of our lending throughout 2010 and this new range is part of that process.

“We have a limited tranche available to gauge demand and the customer response will help shape our mortgage offering during the rest of this year.”

London & Country head of communications David Hollingworth says it is a concern that this deal is only available directly through the lender but feels it is a positive move in that it increases the potential for competing lenders to offer other 95 per cent deals through IFAs.

He says: “Skipton already being out there at least means other lenders may be tempted to dip their toes into the water without the fear of attracting too much business volume.”

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