Skipton Building Society is set to increase the rate on its 100% ‘Track Record’ mortgage as lenders continue to reprice their products.
The Skipton has not yet confirmed the new price for the product that was launched at 5.49% in early May. The new rate will be issued later this week.
Charlotte Harrison, CEO of home financing at Skipton Building Society said: “From Friday the 16th June we are increasing the rate of our Track Record mortgage from 5.49% to 5.89% for new customers.
“The increased rate reflects the recent changes within the mortgage market, we have repriced the product fairly to ensure it remains on the market at a competitive rate. The rate change will not impact existing customers who’ve recently taken out the fixed rate product at 5.49%.
“As a responsible lender, we need to be sensible with our approach to market with this product to ensure tenants don’t take on more than they can realistically afford. The Track Record mortgage has been carefully designed to ensure anyone applying for the product will not pay any more than what they’re currently paying in rent. Therefore, the rate increase will not increase the monthly payments beyond what a person is already used to paying in rent.”
Nicholas Mendes, mortgage technical manager at broker John Charcol, added: “This was always going to be on the cards with current rates rises volatility.
“While the scheme was designed to support FTB, unfortunately it’s been launched at the wrong time.
“At the time of launch the track record mortgage was priced on a 5-year fixed of 5.49%, which was higher than other higher LTV products at the time.
“The rate had enough margin to take into account higher LTV risks and small increases in fixed rates.
“Swaps have increased since the product was launched, average 5-year fixed rates are increasing, and the product is no longer viable to remain unchanged.”
