HSBC slashes the cost of its fixed-rate mortgage range

HSBC has announced further cuts to interest rates attached to many of its fixed rate mortgages.

The move seems to be in response to the announcement from Tesco Bank yesterday that it was launching two new fixed rate mortgages.

Tesco Bank launched a two-year fixed rate mortgage at 2.64 per cent for those with a 60 per cent loan-to-value (LTV) ratio. However, HSBC has cut the rate on its two-year fix for those with a 60 per cent LTV to just 2.44 per cent.

The two deals remain fairly similar in overall cost as HSBC’s product fee is £500 more at £1,499. Alternatively the deal is available at a rate of 2.89 per cent with a fee of just £599.

For borrowers with less equity, HSBC offers its two-year fix at 3.09 per cent for 70 per cent LTV borrowers and at 3.49 per cent for 80 per cent LTV borrowers. Both of these products come with a fee of £599.

For borrowers wanting a longer term fixed rate deal, HSBC has launched a five-year fixed rate mortgage for borrowers with a 30 per cent LTV at 3.49 per cent with a £599 fee.

80 per cent LTV borrowers can fix for five years at 3.99 per cent, again with a £599 fee.

Seven-year fixed rate deals are also on offer from HSBC. For 60 per cent LTV borrowers, the rate charged is 3.79 per cent with a £499 fee.

For first-time buyers or borrowers with just a ten per cent deposit, HSBC offers fee-free two, three, five and seven-year fixed rate mortgages at just 4.89 per cent or alternatively a fee-free lifetime tracker at the Bank of England base rate (0.50 per cent) plus 3.99 per cent, a total of 4.49 per cent.

Peter Dockar, Head of Mortgages at HSBC, said: "With some lenders increasing their standard variable mortgage rates, we understand that UK borrowers are looking at ways to make savings on their outgoings. 

“We have consistently offered competitive rates and continue to review our mortgage range to ensure our customers have access to the best possible rates, whether they are buying for the first time, moving house or remortgaging."