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Chelsea announces the UK’s lowest ever five year deal mortgage deal

Borrowers wanting a mortgage of up to 70% LTV (loan to value) can benefit from a rate of 3.19%, or 3.39% for the offset option. Both mortgages have a fee of £1,495.

‘This is the lowest five year fixed rate mortgage ever to come to the market, which is great for customers wanting longer term security in fixing what is likely to be their biggest monthly outgoing,’ said Chelsea Building Society product manager Jemma Smith.

‘We've also reduced rates on some of our shorter term fixed rate mortgage deals ensuring that whatever the LTV or term required, we have a competitive deal to suit customers' individual needs,’ she explained.

‘We raised our profile in the mortgage market in 2011 with a range of popular and innovative products and want to build on that success in 2012, encouraging even more borrowers to consider the Chelsea, whatever type of mortgage they are looking for,’ she added.

Chelsea Building Society is also reducing two year fixed rates available up to 85% LTV:3.44%, or 3.64% offset, each with an £1,895 fee and 3.59%, or 3.79%, each with a £395 fee.

The launch of the lowest five year fixed term deal on the market from Chelsea could offer home owners a glimmer of hope in the face of rising living costs says, the independent price comparison and switching service.

‘This Chelsea mortgage could prove a lifeline for home owners worried about increasing mortgage payments. Although it may be another year before the base rate rises, the only way for mortgage rates to go in the long term is up. Consumers can protect themselves against these rises by fixing but this has tended to come at a high price. The launch of this lowest long term 5 year fixed in market from Chelsea will offer peace of mind but without the hefty price tag,’ said Michael Ossei, personal finance expert at uSwitch.

‘However, at a 70% LTV and with fee of £1,429 this mortgage could still be out of reach for some. First time buyers especially may struggle with the chunky deposit required and the additional arrangement expenses. The next best option for those who want to budget their costs in the short term could be either Cooperative Bank or Yorkshire who have five year fixed rates at 3.39% both at 75% LTV with a fee of £990,’ he continued.

‘But hopefully this move from Chelsea will cause an increase in the number of five year fixed deals on the market, giving those looking for security more choice. The increased competition in this part of the mortgage market could also lead to a further fall in the fees and rates for longer term fixed mortgages, meaning that those who want to budget and prepare themselves for an increase in rates won't be too heavily penalised,’ he added.