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HSBC launches 1.99% mortgage

HSBC 480

HSBC is launching a direct-only two-year fixed rate of 1.99 per cent up to 60 per cent LTV.

From today, the rate is available with a fee of £1,999 or £1,499 for HSBC current account holders.

The lender is also cutting rates on a number of existing two and five-year mortgages.

A two-year fixed rate up to 60 per cent LTV is now available at 2.49 per cent, down by 0.3 per cent from 2.79 per cent, and with a £599 fee.

A five-year fixed rate is available at 3.19 per cent, down by 0.1 per cent from 3.29 per cent with a £499 fee while a fee-free option is available at 3.39 per cent, down by 0.1 per cent from 3.49 per cent.

HSBC head of mortgages Peter Dockar says: “While there remains a low expectation of bank base rate increasing in the near future, it has been a week of surprises at the Bank of England and as yet we don’t know whether the new Governor will bring a change of heart within the monetary policy committee.

“We have seen increasing numbers of customers seeking the security of a fixed rate and I expect this trend to continue. With the security of our retail deposit funding, HSBC is committed to offering competitive rates to benefit our customers.”

Moneyfacts.co.uk finance expert Rachel Springall says: “The HSBC 1.99 per cent deal has the lowest rate for a two-year fixed mortgage on the market and existing customers will be rewarded with £500 off the booking fee, which is great to see.”

HSBC launched a 1.99 per cent mortgage in September 2009. The product ran for two months before it was taken off the market.

It was then relaunched in March 2010.

Tesco offered its own two-year fixed rate at 1.99 per cent in October, as a consequence of signing up for the Funding for Lending scheme. The product was pulled after less than a month after the allocated funds were used.

Abbey also launched a two-year fixed rate at 1.99 per cent earlier this month.

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