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Yorkshire targets first time buyers

Yorkshire Building Society has designed a five-year fixed rate mortgage for first time buyers.

The mortgage is fixed at 5.99 per cent until January 12, 2006 and has redemption penalties for five years. Borrowers who redeem early must pay five per cent of the amount repaid in the first three years, four per cent in year four and three per cent in year five.

The benefit of a five-year fixed rate is that it provides stability if interest rates are uncertain. But if interest rates go down during the fixed rate period, borrowers are discouraged from moving to cheaper rates by the redemption penalties.

The Yorkshire Building Society mortgage has an attractive rate but is not the cheapest on the market. According to Moneyfacts on December 7, 2000, Bristol & West has a five-year fixed rate of 5.85 per cent, but its redemption penalties are higher at between seven and five per cent of the amount repaid.

The Yorkshire Building Society mortgage might attract those who borrow higher amounts because loans up to 90 per cent of valuation are free from mortgage indemnity premiums. Bristol & West offers this incentive too, but only on loans of up to 85 per cent of valuation.


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New mortgage range from Yorkshire

Yorkshire Building Society has launched a new fixed rate mortgage at 5.99 per cent fixed to 12 January 2006 on a maximum loan to value of 95 per cent. Redemption charges of 5 per cent, 5 per cent, 5 per cent, 4 per cent and 3 per cent apply during the five year term. There […]

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