Chelsea Building Society today launched Britain's cheapest-ever five-year mortgage, fixed at 3.19%, in its latest effort to boost its share of the home lending market.
The mutual, owned by Yorkshire Building Society, is offering the mortgage to homebuyers with a 30% deposit, although it comes with an expensive arrangement fee of £1495.
That makes it a top buy only for buyers borrowing £117,000 or more.
"Below this, you're financially better off with the Co-operative bank's 3.59% rate with no product fee," said Andrew Hagger at comparison site Moneynet. It's the latest sign of intent from Yorkshire, which last year leapt to the top of the best buy table when it launched what was then Britain's cheapest 10-year home loan.
The building society funds about 85% of its mortgages through savings.
Although banks are trying to woo potential buyers with competitive fixed-rate deals, tracker-rate mortgages are become more expensive as eurozone fears hit intrabank lending rates.
The Yorkshire is Britain's second-biggest building society.
