Yorkshire Bank, five-year fixed rate mortgage at 3.89%, no fee, £250 cashback
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Yorkshire Bank, five-year fixed rate mortgage at 3.89%, no fee, £250 cashback

Editor 9
Editor
Found 2nd Mar
Yorkshire Bank is offering:
  • Five-year fix at 3.89%
  • Available up to 95% LTV
  • No fee Free valuation
  • £250 cashback
  • Overpayments allowed

Why I like this product
Ok, this rate might sound high but it’s available up to 95% LTV – so ideal for first-time buyers with just a 5% deposit. It’s a Moneyfacts best buy in this category.

Five years is a pretty sensible length of time to fix for at the moment too.

How to compare mortgages
As always, it’s important to calculate the total cost of a mortgage deal. You can do this by adding together the total monthly payments over the fixed period (5 x 12 = 60 payments in this case) then adding any product fee minus any cashback.

Obviously, this Yorkshire Bank deal is fee-free so the calculations and comparison are pretty straightforward.

In general, zero-fee deals are better for people with smaller mortgages – those with larger home loans will benefit more from lower rates than reduced fees.
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9 Comments
Maybe best to put MORTGAGE in your title (sorry, don't know how to amend). Good rate...sadly I thought it was "savings fixed rate"
Excellent
tomba1 h, 27 m ago

Maybe best to put MORTGAGE in your title (sorry, don't know how to amend). …Maybe best to put MORTGAGE in your title (sorry, don't know how to amend). Good rate...sadly I thought it was "savings fixed rate"


So did I!
Just my 2p worth...
It is a good rate if you’re a FTB working on 95%LTV but fixing for 5 years might not be the best move as with overpayments and increased house prices you may be able to lock-in a better rate based on a better LTV after 2-3 years... so effectively shooting yourself in the foot by being locked in.

Everyone has their own situation obviously but we were in a similar position a year ago and have locked in a similar rate for just 3 years and anticipate getting a better rate when we remortgage at hopefully 80-85% LTV 2 years from now.
My mortgage is due to renewal in february next year. Just before brexit, so hopefully situation will be clearer to know should we fix for long or short term.
buttonpushervic2nd Mar

Just my 2p worth...It is a good rate if you’re a FTB working on 95%LTV but …Just my 2p worth...It is a good rate if you’re a FTB working on 95%LTV but fixing for 5 years might not be the best move as with overpayments and increased house prices you may be able to lock-in a better rate based on a better LTV after 2-3 years... so effectively shooting yourself in the foot by being locked in.Everyone has their own situation obviously but we were in a similar position a year ago and have locked in a similar rate for just 3 years and anticipate getting a better rate when we remortgage at hopefully 80-85% LTV 2 years from now.


You also need to looks at the numbers rather than just the LTV.

Example: Borrowing £130k (reasonable figure for a first time buyer going for a free fee product) at the end of 5 years you will owe £113k

Example: Borrowing £130k after 3 years you will owe £120k. Then you take a 2 year fixed at 2.5% (based on today's best rate plus 2x ¼ points rise). So borrowing £120k after 2 years you will only be a few hundred pounds better off.

So you are swapping £200 (or so) for the security of a fixed mortgage for another 2 year. It may be a good thing if say your finances change (redundancy or a baby).

Just food for thought.
GAVINLEWISHUKD2 h, 33 m ago

You also need to looks at the numbers rather than just the LTV.Example: …You also need to looks at the numbers rather than just the LTV.Example: Borrowing £130k (reasonable figure for a first time buyer going for a free fee product) at the end of 5 years you will owe £113kExample: Borrowing £130k after 3 years you will owe £120k. Then you take a 2 year fixed at 2.5% (based on today's best rate plus 2x ¼ points rise). So borrowing £120k after 2 years you will only be a few hundred pounds better off.So you are swapping £200 (or so) for the security of a fixed mortgage for another 2 year. It may be a good thing if say your finances change (redundancy or a baby). Just food for thought.


You missed my bit about overpayments. My mortgage as a FTB last year was for just under £350k... by overpaying a bit here and there and keeping fingers crossed for 5% increase in house price per year (not inconceivable where we live) I’m hoping we can get a rate at remortgage time that will be £200ish less a month - which will then be allocated for monthly overpayments to pay it down even quicker.
buttonpushervic1 h, 16 m ago

You missed my bit about overpayments. My mortgage as a FTB last year was …You missed my bit about overpayments. My mortgage as a FTB last year was for just under £350k... by overpaying a bit here and there and keeping fingers crossed for 5% increase in house price per year (not inconceivable where we live) I’m hoping we can get a rate at remortgage time that will be £200ish less a month - which will then be allocated for monthly overpayments to pay it down even quicker.


I'm not trying to say I was right and you were wrong. Just something for people to think about.

Yes certainly the bigger the numbers the more beneficial it will be. Not sure how many people have a 95% mortgage which is in the £1800 ball park per month. But you seem to have done your homework and have a plan that works for you.
Original Poster Editor
tomba2nd Mar

Maybe best to put MORTGAGE in your title (sorry, don't know how to amend). …Maybe best to put MORTGAGE in your title (sorry, don't know how to amend). Good rate...sadly I thought it was "savings fixed rate"


Ah, yes, good point
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