Yorkshire building society discounted SVR mortgage, initial rate 0.87%, max LTV 65%, £1,495 fee
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Yorkshire building society discounted SVR mortgage, initial rate 0.87%, max LTV 65%, £1,495 fee

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Found 30th Oct
Yorkshire building society reckons it’s currently offering the “lowest ever” mortgage rate with a two-year discounted standard variable rate (SVR) with an interest rate currently of 0.87%. It’s available up to 65% LTV and comes with a £1,495 fee.

While I’m not sure if the claims of “lowest ever” stack up – there were some dirt cheap trackers around when rates hit 0.5% eight-and-a-half years ago – it’s a very competitive rate for the current market.

The deal
A two-year variable mortgage (until 29/02/2020) with a discount of 3.87% from YBS’s standard variable rate.

YBS’s SVR is currently 4.74%, which gives an initial pay rate of 0.87%.

After that the mortgage reverts to the SVR for the remainder of the term – although you’d be free to remortgage after the discount ends.

What you need to know about SVRs
Discounted SVR mortgages follow the lender’s standard variable rate. If the SVR falls, the interest charged on your loan will fall by the same amount until it reaches the interest rate collar on the product (0% in this case).

If the SVR rises, the interest rate you pay will rise by the same amount.

In general, SVRs rise and fall in line with the Bank of England base rate – but not necessarily, the lender can increase it whenever it wants. So be warned.

Would YBS lure in borrowers with a bargain rate then up its SVR on a whim? Your guess is as good as mine.

Base rate speculation
There’s been increasing speculation that the base rate could increase as soon as this Thursday’s MPC meeting. Inevitably, this would lead to Yorkshire upping its SVR and so the pay rate on this product increasing.

However, we’ve been here before with rumours that the base rate will rise soon. And it hasn’t yet. Without a crystal ball, I can’t tell if this month will be different. So, you need to weigh up the pros and cons before taking out a variable rate product at the moment: could you afford a rate rise?

3 Comments

Fee could be a killer, so check how much you would actually save over the 24 months when you add in £5 short of £1,500!

I had a bad experience with YBS resulting in them having to pay compensation.
I wouln't go anywhere near them now.
Edited by: "CrazyBob" 30th Oct

Also discounted variable so when rates rise so will the rate! And even though won't be rising fast this could be 1.02% in little over a month
Edited by: "Anon32" 30th Oct
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