The direct-only lender will offer the product to borrowers with a deposit of 40%. Fees of £1,695 apply to the mortgage, which is available from today.
Chelsea BS, owned by Yorkshire Building Society, has made the move the day after ING Direct announced the launch of a 1.94% tracker product.
ING will also offer the lowest five-year fixed rate product on the market with the launch of a 2.69% product, a rate that has also been matched by direct only lender First Direct after a rate cut today. Both lenders will charge fees of £1,999 on their respective products.
Yorkshire BS has also cut its two-year fixed rate product to 1.94% with fees of £1,495. Fellow direct only lender HSBC currently offers a 1.98% two-year fix.