Skipton launching new 0.99% two-year fixed rate mortgage

The rate is the joint lowest we've ever seen for a two-year fixed mortgage, but a hefty £1,995 fee means it's not the market's cheapest. Yorkshire Building Society continues to offer the 0.99% two-year fix with a £1,495 fee it first launched in March.

Mortgage lenders are locked in an ongoing price war, with a raft of rate reductions over the last few months.

If you're thinking of a two-year fix or any other mortgage, download our FREE 2017 guides for Remortgaging or First-Time Buyers which explain all key info. And see how the best deals compare with our Mortgage Best Buys tool.

What are the details of the deal?

The Skipton deal launches on Thursday (13 July), and is available to remortgage and home purchase customers. The fee's fixed at 0.99% over two years if you have a 60% LTV (loan-to-value ratio – ie, the proportion of the property's value you're borrowing) – but you'll need to factor the £1,995 fee into the overall cost.

David Hollingworth, from mortgage broker L&C, told MoneySavingExpert.com: "Skipton's offer shows how competitive the market currently is – they have come out all guns blazing to grab the attention. However, the consumer has to factor in that fee, which is high. It may pay to go slightly higher up the scale to offset that high fee."

He added that the deal's timing is "interesting... as many believe interest rates may start to climb", which would push up mortgage rates, but "at the moment Skipton is offering value".

Always do a full comparison to find the best deal suited to your circumstances – use our Mortgage Best Buys tool to see what's out there.

What if I'm not near the end of my mortgage?

You may in some cases be able to lock in a good rate up to seven months before the end of your mortgage term, which can protect you if rates rise in the meantime.

For full info on how this works, and the risks, see Long lock-in mortgage help – and always contact a mortgage broker if you're unsure.

You may also be able to save if you're on a pricey fix – as long as your early repayment fees aren't too exorbitant. Use our Ditching your fix? tool to check if you can save.