HSBC has become the first bank to offer a 1.99 per cent rate fixed for five years, the lowest rate to date on a mortgage over that period, Tracie Pearce has announced.
The head of mortgages said: “We are committed to helping customers take their first step onto, or move up, the property ladder. With rates lower than they have been before, we are proud to introduce the lowest five-year fixed rate to date.”
The mortgage is available at 60 per cent loan-to-value and has a booking fee of £1,499 to those who either have the deposit, or the equivalent equity in their home.
The bank has also launched a two-year fix at 1.24 per cent, and continues to offer its two-year discount rate at 0.99 per cent. Both are available at 60 per cent LTV with a £1,499 fee.
Calum Bennie, savings specialist at Scottish Friendly, said the breaking of the 2 per cent barrier was “unlikely to help most first-time buyers who are the ones who really need help getting on the housing ladder.
“Because of the need to provide a 40 per cent deposit, this deal is more likely to appeal to those with plenty of money to spare, in particular pensioners taking advantage of their new-found pension freedom.”
Chris Williams, chief executive of Bristol-based Wealth Horizon, said: “The current generation of pensioners has always had an obsession with property, despite the fact that the market is notoriously volatile.
“Those looking to invest their pension in this way should be warned that bricks and mortar cannot and should not be the sole answer to how they fund their retirement.
“The key for investors is to diversify their exposure and make sure they are not leaving themselves vulnerable by taking too much risk on one market.”