Skipton Building Society launches low-rate mortgage range including 3.35 per cent deal
Skipton Building Society has launched a new low-rate mortgage range
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Skipton Building Society has launched a low-rate mortgage range in a bid to support borrowers at risk of payment difficulties.
Owner-occupier borrowers with Skipton Building Society who are approaching the end of their current deal, and who will be financially stretched on current mortgage rates, will get the chance to bridge their payments by maintaining a lower interest rate for two years.
The “member only” two-year fixed-rate deals include a 3.35 per cent rate for borrowers with a 40 per cent deposit and a 3.59 per cent rate for people with a 10 per cent deposit.
Borrowers should note that deals do carry a fee of five per cent of the existing loan amount, which can be added to the mortgage balance.
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The building society said the products can give members “another option” but they will not be the right move for everyone.
Members with a 25 per cent deposit could get a 3.39 per cent rate via this range, and there’s also a 3.49 per cent rate for those with a 15 per cent deposit.
Across all deposit sizes, the average two-year fixed homeowner mortgage rate on the market is 6.41 per cent, according to money comparison website Moneyfacts.
Fixed-rate mortgage rates have been reducing gradually in recent weeks amid more positive expectations over inflation.
Skipton Building Society said the move extends the support it already offers through the mortgage charter, something many lenders have signed up to, to help borrowers who may be at risk of struggling.
The building society said it would work with its borrowers who are facing financial difficulties to understand their specific situation, and offer options to help in the short and medium term.
Charlotte Harrison, Skipton’s CEO of home finance, said: “It’s crucial lenders offer as much support as we can to ensure borrowers remain secure in their own homes through these turbulent times, by looking at further opportunities to provide certainty and confidence in the ability to maintain payments.
“Signing the mortgage charter was just one step in us providing support but we feel we can do more for our borrowers.
“It’s important we think differently, on what further support could be to make a real difference for our members who may be facing a future of financial difficulty due to the limited options on the market available to them.
“Our borrowers have benefited from strong growth in house prices over the last couple of years, earning them additional equity in their properties.
“For those who are financially stretched, this is a good time to consider if they can make that equity work for them.”
Ms Harrison said the building society will always work with borrowers to understand their personal circumstances and work with them to find a solution that’s most suited to them and their situation.
She added: “This range of mortgages presents another option for our members – it’s not to say, that they will be right for everyone.
“We really encourage all homeowners to be aware of what help is available from their lenders. If they’re worried they’re going to get into financial difficulty please do reach out to your lender.
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A finance expert said the options 'may well be a lifeline for some existing borrowers' but borrowers are being urged to look at other options from alternative lenders as well
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“The sooner a person gets into contact with their lender the more options they have available to them to help tackle the problem early.”
Stephen Perkins, managing director at Yellow Brick Mortgages, told website and news agency Newspage that borrowers should weigh up the numbers, saying: “This is a very innovative move by Skipton to effectively allow their existing clients to capitalise some of their interest in exchange for lower monthly payments, which will also increase their client retention and reduce risk of arrears.
“However, borrowers need to weigh up the overall cost of the product against their personal priorities.”
Rachel Springall, a finance expert at Moneyfacts, said: “It is good to see Skipton Building Society supporting its existing borrowers with more options for their consideration when coming off a deal.
“These options may well be a lifeline for some existing borrowers but it is vital they explore other options from alternative lenders too.
“Anyone concerned about rising repayments would be wise to seek independent advice to go over all the options available to them, as they will need to consider all the associated costs when changing their deal.”