Great news for property buyers, mortgage rates are falling.
Just as we were all starting to criticise the banks for their taking excessive profits by increasing their margins on mortgage interest rates we now see a surprise move by HSBC who announced a 1.99% mortgage offer.
But you have to read the detail that goes with this…..
- There is an arrangement fee of £1,199
- You need a massive 40% deposit.
- The rate tracks HSBC variable rate with a discount of 1.95%, so as rates go up in the next year or two then so will the 1.99% mortgage rate.
- The discount of 1.95% is offered for 2 years, after that the rate reverts to HSBC’s variable rate (currently 3.94%).
Overall though this is still a great deal from HSBC, and one that will certainly shake up the market. Already a number of other lenders have improved their mortgage offers, these include:
Woolwich (part of Barclays) trimmed their 2 year fixed product by 0.2% to 4.09%. You need 30% deposit and there is a £999 arrangement fee.
Cheltenham & Gloucester trimmed their 2 and 3 year fixed products by 0.2% to 4.19%. You need a 40% deposit.
Apart from the HSBC offer the reductions are still quite small compared with the falls in the cost of wholesale money (e.g. 2 year swap rates and LIBOR), but it is a move in the right direction.
Please note – we are not mortgage advisors, we simply publish what we find for your information, please speak to a regulated mortgage broker for advice.
