HSBC launches lowest mortgage rate

Wednesday, 14 January 2009 12:00

HSBC has launched its lowest mortgage rate ever at 2.99 per cent - but only for those who meet the strict criteria.

The new range of mortgages includes the Premier two-year discount rate available at 2.99 per cent, and new trackers, available to customers with a 25 per cent deposit.

The new low rate will only be available to Premier customers, who must hold £50,000 in savings and investments with the bank or by holding a £250,000 mortgage with HSBC and a salary of £75,000.

HSBC's SVR (standard variable rate) also falls to 3.94 per cent on February 6th, the lowest it has ever been, on a historically low Bank of England base rate.

Martijn van der Heijden, head of mortgages at HSBC said: "As the Bank of England base rate comes down, we have the ability to increase even further the affordability of our mortgages, many of which were already the cheapest to be found on the high street."

David Bexon, managing director of SmartNewHomes.com, welcomed the move.

"HSBC's latest action could reignite competition within the mortgage market, forcing other lenders to take their heads out of the sand and start doing their job - lending," he said.

"While a flurry of new mortgage deals are unlikely to flood the market following this announcement, it may be the catalyst we need to kick start the mortgage market for 2009."

The Bank of England has cut the base rate of interest from 5.5 per cent in January 2008 to the current rate of 1.5 per cent.

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