Chelsea cuts mortgage rates for low deposit borrowers

Chelsea Building Society has cut its mortgage rates for first-time buyers and those with smaller deposits.

The rates on Chelsea’s 75% loan-to-value (LTV) mortgages have been cut by up to 0.2%, and its 90% LTV mortgage range has been decreased by as much as 0.3%.

New deals on offer now include a 75% LTV two-year fixed rate deal at 2.49% with a £1,695 fee and a 90% LTV two-year fixed deal at 3.89% with a £1,495 fee.

The building society is also launching a £500 cashback incentive on its two-year fixed rate deals, including a 75% LTV deal at 2.94%, 85% LTV at 3.99% and a 90% LTV at 4.19% – all of which have a fee of £895.

The £500 cashback deal is to help new homeowners manage the costs of a mortgage.

Chelsea product manager Sunjeev Sahota said: ‘The new year is the perfect opportunity to start thinking about reducing your mortgage payments for the rest of the year.

‘We’ve reduced rates across 75%, 85% and 90% LTVs, so whether you have a small or large deposit you can take advantage of the new deals.’

First-time buyers and those looking to remortgage in 2013 are benefiting from falling mortgage rates.

Falling rates are mostly due to the government’s Funding for Lending scheme that launched in August. The government gave lenders access to £80 billion to loan to homeowners, and the more money the banks and building societies lend the better the rate the government gives to banks on the borrowed money.

This has led to mortgage lenders trying to entice mortgage customers with low rates.