The latest lender to join the government’s Help to Buy mortgage guarantee scheme is HSBC with two fixed rate mortgages available up to 95 per cent loan-to-value.
HSBC’s products are coming in cheaper than RBS/NatWest and Halifax/Bank of Scotland. The two-year fixed rate deal is 4.79 per cent while the five-year fix is 4.99 per cent and both have a £99 booking fee. A minimum £1,000 deposit is required.
Both NatWest and RBS are offering a two-year fix at 4.99 per cent and a five-year fix at 5.49 per cent with no fee. Halifax has a two-year fixed rate at 5.19 per cent with a £995 fee.
Initially HSBC’s mortgages will only be available to customers looking to buy a property, but it will look at offering these loans to remortgage customers at a later date.
All HSBC mortgage borrowers are assessed to ensure they could afford repayments at an interest rate significantly higher than the Bank of England base rate. For customers opting for a 90 per cent to 95 per cent LTV mortgage HSBC will ask them to acknowledge a monthly repayment illustration at a responsible long term rate. This will provide an indication of their increased monthly mortgage payment when, as expected, interest rates rise.
Brendan Cook, head of retail banking and wealth management for HSBC UK, said: “We want to support our customers, whether they are buying their first home or moving up the housing ladder. In order to protect them, we want to ensure they can afford their repayments when interest rates rise.”
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