The latest two-year deal was available from 8 March 2013 at 60 per cent loan-to-value with a £1,695 fee, after which it reverts to Chelsea’s standard variable rate, currently 5.79 per cent. There is an offset equivalent at 1.94 per cent.
The product is available for those moving home, remortgaging from another lender and first-time buyers, and the minimum loan amount is £25,001.
According to the firm, a lot of borrowers are recognising the benefits of an offset mortgage, particularly when returns on savings have been falling, because offset is tax-efficient and makes borrowers’ savings work harder, while still allowing access to the money should they need it.
All offset mortgages can be Offset Plus, where family or friends, such as parents or grandparents, can use their savings to offset against the mortgage, again while still retaining control over access to their money.
There are offset alternatives to all mortgage products in the range and, since November last year, Chelsea’s first-time buyer mortgages have included an offset alternative at the same interest rate as the non-offset mortgage.
According to Chelsea, the recent rate reductions are part of ongoing efforts to provide a range of attractive and competitive products, including adding to the choice of lower LTV products with new 60 per cent LTV mortgages.
Chelsea Building Society has been part of the Yorkshire Building Society Group since 2010, with the group achieving a pre-tax profit of £157.1m in the last fiscal year.
Provider view
Chelsea product manager Sunjeev Sahota said: “We are committed to providing the most competitive mortgages and are pleased to be able to offer another market-leading short-term fixed rate. Chelsea has made a strong start to mortgage lending in 2013 and now we have reduced what was already an excellent best-buy product by a further 0.15 per cent, which will appeal to homebuyers with a larger deposit or homeowners wanting to remortgage. Offset mortgages are particularly popular among Chelsea borrowers so we’re glad to be able to offer the additional choice of an offset version of such a competitive mortgage.”
Adviser view
Minesh Patel, chartered financial planner of London-based EA Financial Solutions, said: “This is an exceptional rate for purchases and is good value for consumers looking to move home or purchase a property. Chelsea deals directly with consumers and removes the intermediary, which means it is able to offer a very good rate both for a conventional fixed rate and offset equivalent. The downside is the 5.79 per cent standard variable rate after the two-year fixed rate is high and this is one of the reasons that the rate is so low during the fixed-rate period as well as not paying a fee to any intermediary. It is not as attractive for re-mortgages where legal fees and valuation costs would have to be paid in addition to the arrangement fee. Consumers should consider the overall APR, which calculates total costs, rather than simply looking at the headline rate.”
Charges
There is a £1,695 fee, with an offset equivalent at 1.94%.
Verdict
This is a good rate worth looking at.
