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Chelsea offers five-year fix at 3.99%

Mortgage borrowers hedge against uncertainty

Chelsea Building Society has launched a market-leading 5-year fixed rate mortgage which charges 3.99%. It is available for those with a 25% deposit and has an arrangement fee of £495.

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The new offer from Chelsea joins 5-year fixed rate offers from Britannia and the Co-op, which also charge 3.99% but carry a higher £999 arrangement fee.

Fixed rate numbers rising  

According to the brokers John Charcol, more people opted for fixed-rate mortgages in May than at any time since October 2009. Their latest mortgage index shows that 26% of all borrowers chose a fixed-rate deal. 

Five years is the longest period that most people fix for, but Chelsea’s sister company, Yorkshire Building Society, has a ten year fixed rate deal at 4.99%. The product fee for this is £995, with £195 payable on application and £800 added to the mortgage on completion.

Majority still prefer variable rates   

The John Charcol index shows that most borrowers still prefer a variable mortgage, expecting interest rates to stay at their current low levels. Some new tracker deals are currently as low as 2.65% and even standard variable rates at 3.99% for some lenders. 

Shop around for the best deal    

The Which? Mortgage finder can help you compare rates across the market and find the best deal for you. It allows you to compare variable rates or see how much it would cost you to fix.

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