Chelsea Building Society has today launched a market-leading variable rate tracker mortgage with no early repayment charges (ERCs).

The two-year tracker has an interest rate of 1.15%, the lowest variable tracker mortgage rate currently on the market, according to financial information provider Moneyfacts.

It’s available to both home buyers and those looking to remortgage with a 35% deposit. It comes with a £995 product fee.

The new mortgage tracks the Bank of England Base Rate, and is designed to provide homeowners with flexibility to exit their mortgage early without paying an Early Repayment Charge should their circumstances change over the next two years.

Richard Barker, mortgage product manager at Chelsea Building Society, said: “Our new tracker doesn’t tie borrowers into their mortgage, giving them breathing space to review their options on a regular basis – with the bonus of not being subject to early repayment charges.

“As it is the lowest variable rate tracker mortgage currently available on the market it will appeal to customers who are keeping an eye on interest rates.”

Rachel Springall, finance expert from Moneyfacts, added: “Borrowers hunting down a market-leading tracker rate will be delighted by this latest deal from Chelsea Building Society. Priced at 1.15%, the deal even surpasses offers from alternative lenders that require an additional 5% deposit. Before entering any arrangement, borrowers should work out the overall true cost of the deal and be mindful that UK interest rates could rise as well as fall.

“The deal also provides borrowers with the flexibility to exit the deal early where many other deals do not.”