Leeds building society has launched a range of discount mortgages with initial pay rates starting at 0.99 per cent.
A two-year deal with a 4.7 per cent discount off Leeds’ standard variable rate (currently 5.69 per cent), giving an initial pay rate of 0.99 per cent, is available up to 65 per cent loan-to-value with a £1,999 fee.
Fee-free deals include a two-year discount of 4.22 per cent on Leeds’ SVR, giving a pay rate of 1.47 per cent, available up to 65 per cent LTV; and a two-year discount of 3.90 per cent, giving an initial pay rate of 1.79 per cent, available up to 85 per cent LTV.
After the end of the two-year term each product has a 1 per cent discount for a further three years.
Leeds Building Society head of product and pricing Matt Bartle says: “We’ve added a new tier of two-year products to our discount mortgage range to offer borrowers more choice. Fixed rate remains the most popular type of mortgage by some margin, both among our customers and in the UK generally, but there’s a trade-off. The interest rate and monthly repayments may be a little higher than if the borrower had chosen a variable rate but they have the security of fixed repayments which can help them to budget.
“However, borrowers who aren’t expecting rate increases in the near future could choose a variable rate product with lower repayments, which is why we’re introducing these shorter-term discount mortgages. While we’re now in a rising rate environment, the indication from the Bank of England is that base rate increases will continue to be small and gradual, in recognition that rates have been at historically low levels for the past decade.
“We’ve included some fee-free products which are likely to appeal to homeowners seeking to minimise the costs of remortgaging to a new deal while rates remain low.”