Brokers hope HSBC’s new direct-only two-year fixed rate of 1.99 per cent at up to 60 per cent LTV will stimulate competition in the advised space.
The rate is now 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.”
HSBC launched a 1.99 per cent mortgage in September 2009. The product ran for two months before it was taken off the market and relaunched in March 2010.
Tesco offered its own two-year fixed rate at 1.99 per cent in October. The offer ran for less than a month before the allocated funding was exhausted. Abbey also launched a two-year fixed rate at 1.99 per cent earlier this month for seven days.
John Charcol senior technical director Ray Boulger says: “Although HSBC is direct-only, it does help to provide some useful competition to the lenders we can deal with.
“We are seeing rates in this area get lower all the time and I think the next interesting move will be in the five-year market.”