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.
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
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