by Mark Johnston
The Chelsea building society, which merged with the Yorkshire building society earlier this year has launch an exciting five year fixed term mortgage at below 4%. The Chelsea building society still prides itself on its long standing culture of giving its customers fair treatment even though it’s now one of the largest building societies in the UK.
General economic uncertainty following the change in government and recent budget has led to some borrowers looking to lock down their mortgage rates with fixed rate mortgages. According to a recent poll carried out earlier this month, 26% of people took out a fixed rate mortgage in May 2010. Mortgage rates have been at an historic low for sometime and its believed by some that we may start to see rises which could see the Bank of England base rate rise from its current 0.5% to 3-4% by next December.
The Chelsea building society’s mortgage is fixed at 3.99% which is a market leader along with Britannia and the Co-op but both its rivals are charging a mortgage fee of £999, in a move that may potentially see the building society take a larger share of the UK mortgage marker it has dropped its fees to £495. With such an eye catching rate and lower arrangement fee many are asking what the catch is? Luckily the Chelsea seem to be offering a pretty good deal for those savers who already have 25% of their mortgage as the loan to value (LTV) is 75%. After the 5 year period the mortgage reverts to their standard variable rate (SVR) which is current 5.79%. If you are looking to fix your mortgage payments for the next five years and have the deposit, then this is a market leading rate at the moment, if you want to compare it with other deals that you have seen so far the APR is 5.2%
The Chelsea is also offering the same 5 year mortgage to those of you that don’t quite have the full 25% deposit. The UK’s largest building society group are also offering this mortgage with a higher LTV of only 85% so you will only need to find a 15% deposit. A higher LTV rate always comes at a price, the Chelsea are offering this 5 year fixed rate at 5.49% which works out at 5.8% APR. At the end of the 5 year period the loan reverts to their standard variable rate of 5.79%.
For those that favour a fixed mortgage period there are some fantastic new products with low rates and the Chelsea building society are one of the market leaders. In the next few months we’ll see some great products come onto the market and we’ll cover them all for you. Keep up to date on the UK mortgage market and mortgage news by visiting us at www.mortgagerates.org.uk.
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