HSBC: fixed-rate mortgage sale

Monday, 23, Feb 2009 05:28

HSBC is offering its 2.99 per cent two-year fixed-rate mortgage until the end of the month.

Due to the expected popularity of the rate, the bank also is introducing two new fixed mortgages: five years at 3.99 per cent and ten years at 4.98 per cent.

All HSBC fixed rate customers can overpay the equivalent of twenty per cent of their monthly payment each month without incurring any early repayment charges (ERCs).

The ERC for payments over twenty per cent declines by one per cent for each year of the loan, to zero at the end of the fixed period.

The special fixed rate mortgage come with a maximum loan-to-value rate of 60 per cent - meaning they are focused at remortgage customers.

Martijn van der Heijden, head of mortgages at HSBC said: "The clear feedback we have received from customers is that they now want to lock into today's historically low interest rates. Base rates don't have much further to fall, so demand for longer term fixed-rate mortgages is increasing.

"Anyone looking to take out our ultra low 2.99 per cent two year fixed rate needs to move quickly as it is only guaranteed to the end of the month."

Andrew Montlake, partner, independent mortgage broker Cobalt Capital, said: "The five-year fixed rate from HSBC is a fantastic product and we have anticipated five-year rates at this level for a while.

"The 60 per cent LTV ballpark and below is where every lender wants to be at present given the recent 'flight to quality'. For consumers in this banding, it is good news as it may encourage other lenders to follow suit.

"The problem with HSBC has been around its service proposition. While this is a very eye-catching product, HSBC just isn't able to move quickly enough for some borrowers."