Chelsea Building Society Mortgage Review

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4 stars
Average rating for this product is: 4 out of 5

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r.a2.'s Review of Chelsea Building Society Mortgage

31st Oct 2002

Overall Rating

4 stars
  • Value for money
    3.5 stars
Good Points

It is interest-only, so more flexible and wholly deductable for buy-to-rent properties.
2% discounted off the variable rate for first 6 months. Assessment is capital based rather than income based .Up to 20% capital repayments pa.


Bad Points

Early redemption charge of 2% within first 3 years. £440 arrangement fee.


General Comments

This interest only mortgage from the Chelsea Building Society is a decent package for someone looking for a buy-to-rent loan on a property that may not have the income to satisfy the usual criteria but has a capital base (eg a redundancy pay-off) who wants to use this capital to gain an income stream (via rental income) and capital appreciation (house price gain over the long-term). These two returns (income from property plus capital appreciation) represent a much better return than the 4%pa in a building society.

There are better packages around than a variable rate (6.1% pa) discounted by 2% for first six months but it is one of the very few loans available which are given on a capital assessment rather than solely an income (ie salary) assessment.

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NameProduct TypeDiscount LengthSubsequent RateOverall Cost  
WoolwichStep Lifetime Trackeruntil 30.04.2011(Base+ 2.49%) currently 2.99%3.00% APR
AbbeyTracker2 year4.24%4.10% APR
WoolwichOffset TrackerTerm(Base+ 2.47%) currently 2.97%3.10% APR