HSBC launches lowest ever five-year mortgage deal

Rates are cut on 14 different  first -time buyer and remortgage deals.

New deals include a two-year fixed rate at 90 per cent LTV reduced to 1.94 per cent with a £999 fee, a two-year Feesaver fixed rate at 90 per cent LTV cut by 0.1 per cent to 2.34 per cent and a five-year fixed rate at 60 per cent LTV with £999 fee reduced by 0.1 per cent to 1.69 per cent.

There is also a 0.25 per cent cut to 2.69 per cent on the 10-year fixed rate mortgage at 70 per cent LTV with a £999 and free valuation.

Tracie Pearce, HSBC’s head of mortgages in the UK, said: “Following the Easter break, the home-buying season should soon be in full swing. 

“These rate cuts across our range of LTVs will help those buying for the first time as well as those moving home or wanting to remortgage.”

Some borrowers are playing a waiting game rather than grabbing the opportunity in front of them.David Hollingworth

David Hollingworth, mortgage expert at L&C Mortgages, said while HSBC has made a number of changes to its products, the most eye catching one is its five-year fixed rate which is the lowest fixed rate currently on the market.

Mr Hollingworth said: “This is yet another signal that the mortgage market is more competitive than ever and lenders are scrapping it out to attract business, whether it’s from those buying their first home, moving house or looking to switch to a better deal. 

“More lenders fighting for business means that they need to stand out from the crowd and truly differentiate themselves. 

“This, coupled with some easing in cost of funds, is forcing lenders to offer rates that demand attention. As a result, lenders are squeezing whatever they can out of their deals and offering more and more eye catching rates.

“Ironically, this means some borrowers are playing a waiting game rather than grabbing the opportunity in front of them. 

“Our research found that more than a third of borrowers are languishing on standard variable rates despite the fact that ultra low mortgage rates are widely available. 

“It is important that borrowers consider the best overall value for them, particularly given the fact that the very lowest rates can carry steep fees. However most lenders will offer a range of rate and fee combinations so there should be something for everyone.”

emma.hughes@ft.com