UK lender HSBC has started a price war by dropping its mortgage rates below one per cent.
Announced yesterday, borrowers with 40 per cent deposit or equity will be able to take advantage of a rate of 0.99 per cent, a 2.95 per cent discount off HSBC’s standard variable rate.
Meanwhile, HSBC’s two-year fixed rate mortgage at 1.49 per cent, the post popular home loan product among UK borrowers, continues to be the lowest in the industry.
“We know how important a low monthly payment is for borrowers, and are committed to offering market leading rates,” HSBC head of mortgages Peter Dockar said.
"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 one per cent,” Mr Dockar said.
The news comes after HSBC announced its plans to enter the UK third-party channel for the first time earlier this month, through a partnership with Countrywide, with which it has an existing relationship for conveyancing work.
“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,” Moneyfacts editor Sylvia Waycot said.