The interest rate tracks the three-month US Dollar Libor rate (USDL)
for the first five years, although the loan is repayable by the borrower in exactly the same way as a UK mortgage, in GBP Sterling.
The initial setting for the USDL rate will be 1.99 per cent and loans start from 3.24 per cent.
Mark Smitheringale, head of corporate communications at Skipton, said: "Last summer, Skipton noted a gap in the mortgage market. UK rates were low and borrowers were delighted, but US rates were even lower still. By tracking US Dollar Libor rates, we realised we could pass the benefit of a rate, which has
remained historically lower than the UK rate, directly to borrowers, without any currency risk. To keep it simple, the rate is reset automatically just four times a year which."
There are four products in the range:
- USDL plus 1.25 per cent fixed differential for five years, which gives an initial rate of current rate 3.24 per cent, up to 85 per cent loan to value (LTV), including insurance.
- USDL plus 1.40 per cent fixed differential for five years, which gives an initial rate of 3.39 per cent, up to 85 per cent LTV, without insurance.
- USDL plus 1.40 per cent fixed differential for five years, which gives an initial rate of 3.39 per cent, up to 95 per cent LTV, with insurance.
- USDL plus 1.55 fixed differential for five years, which gives an initial rate 3.54 per cent, up to 95 per cent LTV, without insurance.
After five years the mortgage reverts to Skipton’s Mortgage Discount Scheme, which gives .05 per cent off the Society’s variable rate at that time.
