Spotlight On: Yorkshire's fixed-rate mortgages

Simon Read
Friday 16 July 2010 19:00 EDT
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The deal

Yorkshire Building Society has cut the rate on its five-year fixed-rate mortgage to just 3.99 per cent for those with a 25 per cent deposit.

Good points

It's the society's lowest-ever five-year deal. The Yorkshire is also offering a 10-year deal at 4.99 per cent again. Fixing now provides certainty ahead, making budgeting easier.

Bad points

The arrangement fee for the five-year deal is £995 while you'll be charged £495 for the 10-year mortgage. FirstDirect's £99 fee shows that the charge has no need to be so high. Meanwhile, the deals are available only to those with a 25 per cent deposit, effectively ruling out first-time buyers or anyone without a fairly large chunk of equity in their existing home.

Conclusion

While interest rates remain low – the Bank of England voted again to keep base rates at 0.5 per cent earlier this month – people on low variable rates may think there is no point in fixing their mortgage. But once rates rise, possibly later this year, low fixed rates deals will disappear. It means keeping an eye on the market is essential.

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