Floating rates more profitable for three rate hikes: YBS

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Adjustable rate mortgages could prove to be financially advantageous if the discount rate, one of the factors used to establish our SVR, remains unchanged or experiences some increases”



The Yorkshire Building Society has reported a 13% increase in the number of borrowers looking for a longer-term fixed rate mortgage following the Bank Rate’s rise to 0.75% in August , but the lender is urging borrowers to weigh their options before choosing their home loan.

The Company is currently offering a two-year discounted standard floating rate of 65% LTV at 1.17%, which could withstand three rate hikes of 0.25% before it is no longer profitable to opt for an average fixed rate. over two years of 2.16%.

Yorkshire has expanded its range of discounted SVR mortgages to include four offers with no prepayment charges.

This includes a reduced two-year variable rate of 1.47% available at 65% LTV and 1.57% at 75% LTV for real estate purchases.

For homeowners wishing to remortgage, Yorkshire offers a reduced two-year variable rate of 1.47% available at up to 65% LTV and 1.48% at 75% LTV.

Janice Barber, head of mortgages at the Yorkshire Building Society, said: “The rise in the bank rate sparked a flurry of fixed rate activity as homeowners sought the security of knowing what their monthly repayments would be.

“While this peace of mind is the most important factor for some borrowers, our analysis shows that variable rate mortgages could prove financially advantageous if the discount rate, one of the factors used to set our SVR, remained unchanged or saw a few increases of the same size in the first two years.

“A mortgage is probably the biggest financial commitment homeowners have, so it’s important they really consider their options when paying off, moving or reviewing their home loan. We hope our new no prepayment charge mortgages will add to the choice available to borrowers. »


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