HSBC launches 0.99% variable mortgage rate
The new deal is priced 2.95% lower than its Standard Variable Rate (SVR) of 3.94%.
HSBC will continue to offer its lowest ever two-year fixed rate mortgage at 1.49%. Both products have a £1,999 booking fee.
Peter Dockar, head of mortgages at HSBC, said: “We know how important a low monthly payment is for borrowers and are committed to offering market leading rates. We’re the only bank to offer a completely paperless mortgage application and are now leading the way by offering a mortgage of less than 1%. Customers can apply for these rates online, over the phone, in branch or through a broker thanks to our new partnership with Countrywide.”
Sylvia Waycot, editor of Moneyfacts, said: “It’s great to see a mortgage offering a rate that, for once, allows consumers to keep more of their money in their own pockets each month, and this new deal from HSBC does just that.”
Kevin Mountford, head of banking at MoneySuperMarket, said it’s the first time HSBC has ever offered a mortgage below 1%.
“With generous penalty-free overpayment allowances of up to 20% of your standard mortgage repayment each month, this really is a great offer. However, potential customers should note the high arrangement fee of £1,999 which they should be sure to add onto the total cost of the loan,” warned Mountford.
“It’s also important to note the rate is linked to the lender’s SVR and not the base rate which means it can change regardless of changes to interest rates made by the Bank of England.
“Overall however, this product offers customers a good deal, and while many will prefer the security of fixed rate products, the discounted rate enables borrowers to benefit from much lower costs than the market-leading two-year fix rate alternative.”