The mortgage market has been stirred up this morning with the news that HSBC has launched the lowest ever five-year fixed-rate mortgage.
The bank is offering borrowers a stunning rate of 2.99% for five years, blowing the old best-buy, Yorkshire Building Society's 3.79% out of the water.
However, there are a couple of downsides to the HSBC mortgage. Firstly, it has a maximum loan to value (LTV) of 60%, so you'll need a deposit of 40% to secure the rate. Secondly, there is a hefty fee of £1,499.
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HSBC has also announced a new fee-free, fixed-rate mortgage for those borrowers with a smaller deposit. They can take advantage of a two-year fixed mortgage with a 90% LTV with a 3.84% interest rate.
"Every borrower has different needs from their mortgage. We recognise that many are looking for certainty with their mortgage payments over the longer term and have launched these products to meet that demand," says Peter Dockar, head of mortgages at HSBC.
Hopefully, HSBC's announcement will just be the opening shot in a new mortgage war and other banks will also start dropping their rates.