HSBC has launched a two-year fixed-rate mortgage priced at 0.99 per cent.
The product has a £1,499 product fee, is available for purchases and remortgages up to 65 per cent loan-to-value (LTV) and customers can overpay up to 10 per cent of mortgage balance per year without incurring early repayment charges.
The maximum loan size available is up to £500,000.
Tracie Pearce, HSBC’s head of mortgages in the UK, said: “The new 0.99 per cent two-year fixed rate is not only the best in category, but it is also available for both purchases and remortgages up to 65 per cent LTV through branches, over the telephone, online or through our selected intermediary partners.
“So, for customers purchasing a new home, coming to an end of a fixed-rate deal or already on a standard variable rate, this is an ideal opportunity to take advantage of a great value product with the security of knowing that payments will not increase over the next two years.”
Rachel Springall, spokeswoman at Moneyfacts, confirmed it was now the lowest fixed rate available and the first sub-1 per cent fixed deal since its records began.
She said: “This offering is likely to attract borrowers who have a 35 per cent deposit or equity in their home and are looking for a low rate with a well-known brand.”
Adviser view: Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed this is the cheapest fixed rate to date.
He said: “However, while the rate is impressively low, if you need to borrow more than 65 per cent LTV and/or more than £500,000 then this deal is not for you,” noting it is not available via the wider broker community, with his firm one of only a handful of brokers able to access the deal.