The 90% loan-to-value (LTV) deal, which is the first of its kind according to Moneyfacts, is available at a rate of 1.98% with a £1,345 product fee. Yorkshire BS said it had no plans to offer the product through its intermediary arm, Accord Mortgages.
Borrowers can also opt for a five-year fixed rate at 2.93% also with a £1,345 product fee. A lower fee option is also available at 2.59% fixed for five years, with no product fee, free standard valuation, with free standard legal work for remortgaging or £250 cashback on completion for purchases.
Earlier this week, HSBC also launched a record-breaking deal with a 0.99% two-year fixed rate for purchase and remortgage borrowers.
Rachel Springall, finance expert at Moneyfacts, said obtaining a cost-effective deal was essential to reducing monthly mortgage payments for homeowners.
“Borrowers must always work out the true cost on their mortgage deal and raise enough cash to cover all their upfront fees, such as legal costs or a product fee,” she said.
“In this low-rate market buyers should ideally be aiming to overpay on their mortgage whenever possible so that they can raise the equity in their home and reduce the term of the loan.”