Some of the UK’s biggest banks are offering record-low mortgage rates as a new mortgage product war heats up.
HSBC has today (20 October) launched a two-year 0.99 per cent discount rate for borrowers with 40 per cent deposit or equity (60 per cent loan to value). The rate – which is 2.95 per cent off HSBC’s Standard Variable Rate (SVR) – is the bank’s lowest ever mortgage rate.
HSBC also offers its lowest ever two-year fixed rate mortgage at 1.49 per cent. Both products have a £1,999 booking fee.
Kevin Mountford, head of banking at MoneySuperMarket comments:
“With generous penalty-free overpayment allowances of up to 20 per cent of your standard mortgage repayment each month, this really is a great offer.
“However, potential customers should note the high arrangement fee of £1,999 which they should be sure to add onto the total cost of the loan. It’s also important to note the rate is linked to the lender’s SVR and not the base rate which means it can change regardless of changes to interest rates made by the Bank of England.
“Overall however, this product offers customers a good deal, and while many will prefer the security of fixed rate products, the discounted rate enables borrowers to benefit from much lower costs than the market-leading two-year fix rate alternative.
“If your current mortgage deal is soon to expire, start looking for the next best now. You can often reserve deals up to six months in advance if you don’t need to switch right away.”
Meanwhile on 21 October Barclays will cut its rates for the seventh time in a row, offering its lowest ever rates on a number of mortgage products, including 1.88 per cent for a two-year fixed term at 60 per cent loan-to-value.
In addition, for homebuyers looking at larger loans, Barclays has reduced its five year fixed rate from 2.89 per cent to 2.75 per cent for loans between £500,000 and £3m at 65 per cent LTV.
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