The Yorkshire Building Society has launched a fixed rate mortgage with a 1.07% initial rate.

The mortgage has a £1,369 product fee and is available to customers with a 35% deposit and comes as the Yorkshire reduces prices across its range by up to 0.35 percentage points.

Options for customers who want to pay a smaller fee include a 1.44% two-year fixed rate with a £345 product fee at 65% loan-to-value (LTV).

The Yorkshire is also offering a range of fee-free mortgages with £1,000 cashback and free standard valuation for customers who don’t want to pay upfront fees.

Rachel Springall, spokesperson at Moneyfacts.co.uk, said: “The new 1.07% deal from Yorkshire Building Society becomes the lowest ever fixed mortgage on record according to Moneyfacts.co.uk, with the rate war ongoing this is the perfect time for borrowers to secure a low fixed rate with this popular brand.”

Mike Regnier, Yorkshire Building Society’s chief commercial officer, said: “We are a responsible mutual lender which uses its financial strength to support its members rather than external shareholders.

“This means we can offer our members very competitive rates in order to enable them to buy the home of their choice. Earlier this year, we launched a 1.18% mortgage, which was then our lowest-ever rate to date, and we are now very proud to better that by offering the UK’s lowest-ever two-year fixed rate mortgage of 1.07%.”