The loan, which is only available through HSBC, is a 1.99 per cent on a two-year discount loan, available to customers with a deposit of 40 per cent of their property value.
The range of new loans includes a second two-year discount mortgage for customers with at least a 25 per cent deposit at an interest rate of 2.49 per cent. Both discount mortgages have arrangement fees of £1,199 and are discounted from the HSBC standard variable rate.
HSBC head of mortgages Martijn van der Heijden says: “Across the market lenders’ standard variable rates are at an all time low, as a result we are launching our lowest ever mortgage rate to appeal to remortgaging homeowners.”
Moneynet.co.uk head Andrew Hagger says: “It’s an aggressive move from HSBC and may shake up what has become a rather stagnant mortgage market – we’ll be watching closely to see how other lenders respond.
“If there’s a flood of applicants chasing the headline 1.99% deal it will be interesting to see if HSBC can manage demand or whether the offer gets oversubscribed and then pulled within a couple of weeks.”
Moneysupermarket.com mortgages channel manager at Hannah-Mercedes Skenfield says: “HSBC has really broken new ground with its sub-two per cent mortgage deal, the first time we have seen rates fall this low in the market.”