28 Apr

Headline rate 'not only mortgage consideration'

Headline rate 'not only mortgage consideration'

Those choosing a mortgage should not just look at the headline rate, Yorkshire Building Society has argued.

The lender has published a table showing that its two-year fixed-rate deal for house purchases - standing at 3.59 per cent - is a higher headline rate than eight other competitors, including the likes of HSBC, First Direct, Alliance & Leicester and Cheltenham & Gloucester.

However, it stated, the deal becomes comparably cheaper when other factors are considered, with its deal offering lower fees and a cashback option, making the total payments over the duration £12,676.

This is less than the £13,293 to be repaid on the HSBC product, which has the lowest rate at 2.89 per cent.

Mortgage manager at the lender Tom Girling stated: "The headline rate of a mortgage isn't necessarily an indication of what a mortgage will actually cost the consumer."

Yorkshire Building Society announced a new capped tracker mortgage yesterday, which will start at 2.69 per cent above the base rate but not increase above 5.49 per cent, so as to shield borrowers from future rises by the Bank of England.

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