Yorkshire Building Society increases cashback for first-time buyer mortgages

The Yorkshire Building Society has announced it would raise its cashback on first time buyer mortgages to help new homeowners with the expected increase in stamp duty starting next year.

The moratorium on the stamp duty is scheduled to expire on January 1, 2010 which means properties valued between £125,000 and £175,000 will have to pay 1 percent tax bill, which is levied on properties bought up to the value of £250,000. This additional tax bill will have a big impact on first time buyers.

To mitigate the effect of the tax bill, the Yorkshire Building Society said it would increase the cashback payable on its first time buyer mortgages from £500 to 1% of the total loan, with immediate effect.

Iain Cornish, chief executive of Yorkshire Building Society said, “Buying your first home is a very expensive business. We have therefore designed these new mortgages to take some of the financial pressure off first time buyers. There are no fees to pay when they take out the mortgage and the cashback will help cover the cost of the stamp duty, which will be one of the first bills to land on the new door mat.”

Under the scheme, first time homeowners can choose between a three-year fixed rate mortgage at 5.84 percent and a five-year fixed rate product at 5.99 percent. In addition to the 1 percent cashback, both mortgages come with a free valuation, free legal fees and there are no other upfront mortgage fees to pay. A 15 percent deposit is required – full product details are shown below.

“As a building society our focus is to provide a safe home for savings, which we use to fund mortgages to help people buy their homes. Providing attractive mortgages to help first time buyers get a foot on the property ladder is therefore very important to us,” Cornish added.