The 0.98% two-year fix is available up to 65% LTV with a £1,545 fee. It then reverts to Chelsea's standard variable rate, currently at 5.45%.
It is believed to be the first time that a tracker mortgage has been offered below 1%, and the lowest currently available on the market.
The Chelsea, which is part of the Yorkshire Building Society Group, has launched the mortgage just a week after Yorkshire Building Society launched the lowest-ever fixed rate mortgage, which has a 1.07% rate for two years and is available with a £1,369 product fee to customers with a 35% deposit.
Rachel Springall, Spokesperson for Moneyfacts, said:
“This new two-year tracker deal priced at 0.98% is the lowest mortgage on sale today and will appeal to borrowers looking to reduce their monthly mortgage payments with a trusted brand. Breaking the 1.00% barrier is sure to grab the attention of borrowers looking for a competitive rate on their mortgage.”
Mike Regnier, Chelsea Building Society’s Chief Commercial Officer, said:
“We like to offer choice and some of our members have continued to opt for variable rate mortgages. We are therefore very proud to offer this very competitive base rate tracker mortgage which tracks the base rate at +0.48% to give a current sub 1.00% rate of 0.98%, and continues the Chelsea’s long tradition of helping more people to buy their own homes.
“A tracker rate can mean mortgage repayments are smaller when rates are low but borrowers should be mindful that any future rises in the Bank of England base rate will increase their mortgage repayments so they should consider whether this is appropriate for them.”
