The Yorkshire Building Society has launched the lowest mortgage rate ever available in the UK at 0.89%.

Its two-year discounted standard variable rate (SVR) mortgage is available up to 65% loan to value (LTV).

The building society is also continuing to offer the joint-lowest ever, and lowest currently available, fixed rate mortgage at 0.99% for loans up to a maximum of 60% LTV.

The new 0.89% mortgage forms part of a wide-ranging refresh of its residential lending, which also includes interest rate reductions of up to 0.16 percentage points on selected 65%, 75% and 85% LTV mortgages as well as new cashback options, including £250 available on certain fee-free products and up to £500 available on remortgage loans

The new 0.89% product matches the Yorkshire’s SVR at a discounted level of 3.85% for two years before reverting to the SVR itself, which is currently 4.74%.

The rate is collared at 0% so if the Yorkshire’s SVR reduced in the two years the variable rate would reduce too – but it would also increase if the SVR rose. It has a product fee of £1,495; an alternative £995 fee option is available at 1.05%.

All remortgage only products now include a cashback option, in addition to a free standard property valuation and free legal service. The range includes mortgages with fees and no fees payable to help meet the needs of a wide range of customers.

James Farrow, senior mortgage manager at Yorkshire Building Society, said: “We are very pleased to offer borrowers the lowest mortgage rate ever available.

“The cost of funding has fallen in recent weeks and as a financially strong building society with no external shareholders to satisfy we have the ability to pass this on to borrowers.”