From Monday Yorkshire building society is offering an exclusive new mortgage aimed at helping first-time buyers.
The “Open Market HomeBuy” loan will replace the Yorkshire’s existing product which involves taking out a regular mortgage for 75% of the property’s value and getting the remaining 25% in top-up loans of 12.5% each from the building society and from the government.
This new product will work on the same principle as above and mean that buyers only need to take out a regular mortgage, from the Yorkshire, for 67.5% of the property’s value. The remaining 32.5% would come from a 15% top-up loan provided by the Yorkshire (interest-free for 5 years, then 3%) and a 17.5% top-up loan from the government (interest-free for the length of the mortgage).
Two deals are to be offered to the buyers with neither charging a product fee:
• 6.79% fixed for 5 years or;
• Bank of England base rate plus 1.49% for five years
Corporate development director at the Yorkshire, Andy Caton said: “The 32.5% total equity loan is an increase on the previous scheme, thereby increasing customers’ buying power and reducing their costs. We have been delighted with the progress of Open Market HomeBuy so far, and are firmly committed to offering potential buyers the best deal possible.”
He added: “Despite the increase in funding rates, we have been able to offer a product at a lower rate than the previous product and with no application fee. The five-year products provide stable monthly payments in those crucial early years of home ownership.”
