HSBC UK slashes mortgage rates to ‘lowest ever’ but some buyers should beware fee | Personal Finance | Finance


The rate cuts apply across all fixed rate mortgage terms and all Loan-to-Values (LTVs). The mortgage rate reductions mean HSBC UK is now offering its lowest ever interest rate of 0.94 percent, alongside other reductions.

Other reductions include:

  • 95 percent LTV (Mortgage Guarantee Scheme) two year fixed rate cut by 0.20 percent, with £999 fee mortgage now at 3.39 percent and Feesaver down to 3.59 percent
  • 75 percent LTV five year fixed rate (£999 fee) reduced by 0.20 percent to 1.29 percent
  • 90 percent LTV five year fixed rate (£999 fee) down by 0.25 percent to 2.99 percent.

Michelle Andrews, HSBC UK’s Heads of Buying a Home, said: “We have made significant rate cuts across our fixed term mortgages, continuing our support for all buyer types whether they are first time buyers as they look to take their first step on the property ladder alongside those also looking at moving up the ladder with their next home, or those whose fixed rate deals are coming to an end and looking for a new deal.

“This change includes our lowest ever mortgage rate of 0.94 percent, plus other rates that are hitting new lows, making it much cheaper for home buyers as well as those looking to remortgage, regardless of the size of their deposit or the equity they hold.”

Robert Payne, Director at Langley House Mortgages commented: “There’s no catch with this product and it is available for purchases, remortgages, further advances and product transfers.

“The product fee is in line with the rest of the market with no hidden costs.

“It is only available to those with at least 40 percent equity or deposit and as long as you have good account conduct, namely no missed payments or defaults, there shouldn’t be a problem obtaining it.

“The offer is valid for six months so even if your current deal has a while left to run it is worth lining up your next deal now.”

That said, it’s important to note that these deals may not be for everyone.

Ashley Thomas, Director at Magni Finance, explained: “The rate is incredible, with a max loan of £5million.

“As a high net worth mortgage broker, this will be very attractive to our wealthier clients.

“However, for those borrowing less than £500,000, when factoring in the £999 arrangement fee, this product is more expensive than HSBC’s 1.14 percent product with no fee.”

Meanwhile, Doug Miller, Director at Lansdown Financial Services, said: “While HSBC’s reputation makes me sceptical about who will actually be classed as eligible, this shows the strength of the market at the moment for consumers as banks appear to be entering a rate war following the end of the Stamp Duty madness.

“While the longer five-year deals are still the more popular choice, and rightly so given the current uncertainty and additional costs and hassle of remortgaging every few years, a sub-one percent deal will still be hugely attractive to many and I would fully expect more high street lenders to follow suit in the coming weeks.”

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