Yorkshire Building Society unveils Help to Buy Isa mortgages - how do they stack up?

5 June 2018

First-time buyers with a Help to Buy Isa might want to consider this new range of products released by Yorkshire Building Society (YBS).

These mortgages are exclusively available to prospective homebuyers with a Help to Buy Isa (HTB) product – regardless of which provider they hold the savings product with.

Here are YBS’s new mortgages on offer:

  • 1.72% two-year fixed-rate mortgage at 90% loan to value (LTV)
  • 2.39% five-year fixed-rate mortgage at 90% LTV
  • 3.09% two-year fixed-rate mortgage at 95% LTV
  • 3.75% five-year fixed-rate mortgage at 95% LTV

Applicants will need to pay £495 in fees but there is a free standard valuation. According to YBS, 43% of all prospective first-time buyers hold an HTB Isa product to save for their first property which means a considerable number of prospective buyers could be eligible.

Janice Barber, mortgage manager at YBS, explains: “We understand how tough it can be for first-time buyers to take that initial step on the property ladder and we’re constantly looking at ways we can help them to own their own home.

“Our latest First-Time Buyers Report showed almost half of those saving for their first property are doing so with a Help to Buy Isa. We’ve launched this exclusive new range of mortgages to directly appeal to this group of prospective borrowers, with the aim of offering a competitive rate and an excellent service to help guide them through their first home-buying experience.”

How do these products stack up?

Experts agree that these HTB Isa-specific mortgages seem to be a first in the market. Offering better rates to those with this Isa product is a clever bit of business as it is directed at sensible first-time buyers who have been actively saving to maximise the benefit of their Isas.

Charlotte Nelson, financial expert at financial data provider Moneyfacts, comments: “These latest Help to Buy Isa exclusive mortgages from Yorkshire Building Society are highly competitive, with all sitting comfortably towards the top of their relevant sectors.”

“Both of the two-year fixed-rate options enter the market as the lowest deal available and are a great cost-effective option for borrowers.”

Nick Morrey, product technical manager for mortgage broker John Charcol, says that comparing the best products available, the two-year product is a market leader right now. The next best he says is a 90% LTV HSBC mortgage with a 1.84% rate and £990 in fees. This is worse on both fees and rates. 

But while the rates on the shorter products are market-leading, the longer-term products are not quite as appealing.

Mr Morrey caveats that the five-year rate – at 3.75% – is much less competitive: “Most of these deals are really quite good, but the 95% five-year fixed isn’t great.

“It is also interesting to note that YBS are not offering these products through its for-broker provider Accord Mortgages yet. It would appear the building society is testing the waters with these deals before offering it to everyone.”

Ms Nelson adds: “With other deals on the market having no fee and even cashback incentives. It will be wise for borrowers who have saved into a Help to Buy Isato assess the market before jumping in feet first.”

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