fixed two-year deal at a rate of 1.99 per cent, with a 15 per cent deposit and a £999 fee. The free-saver equivalent of this deal can be obtained at 2.29 per cent. For loan applicants with a 10 per cent deposit, a rate of 2.49 per cent is offered by HSBC UK fixed for two years, with the £999 fee.
In terms of the deals under the Government-backed mortgage guarantee scheme, people with a 5 per cent deposit can apply for a home loan for a two-year rate at 3.39 per cent with the £999 fee, while the bank’s fee saver equivalent of this deal is offered with a rate of 3.59 per cent.
“It is encouraging to see a continuation to the fixed mortgage rate war for borrowers searching for a new deal,” Rachel Springall, a finance expert at Moneyfacts.co.uk, said. “HSBC now offer a record low rate of 0.94% on a fixed-rate mortgage and have made several other rate reductions which may well turn heads.”
She noted that since several factors determine if the lowest fixed rate is the most appropriate choice, it is important that a borrower weighs all the relevant facts before committing to a deal. “Whether the lowest fixed rate on the market is the most appropriate choice will depend on the loan size and someone’s individual circumstances, so it’s important borrowers weigh up the overall true cost of the deal before they commit.”
“There are now several lenders offering fixed mortgages priced around 1% or less and with competition continuing it will be interesting to see how low lenders are prepared to go to grab the spotlight,” she added.
