HSBC offers two new fixed rate mortgages

HSBC has launched new five and ten year fixed rate mortgages at very competitive rates.

The new five year fixed rate mortgage deal is at 3.99% and the ten year mortgage is at 4.98%.

These mortgage rates are only available for people who are looking to borrow a maximum Loan to Value (LTV) of 60%, in other words that have a minimum 40% deposit.

There are hefty early redemption charges (ERC) on each of these mortgage products, particularly at the start of the mortgage period.

There is a 5% ERC on the 5 year deal in Year 1, and 10% on the 10 year deal. The ERCs though do reduce by 1% per year, meaning that in the final year the ERC will have fallen to 1%.

The good news is that mortgage overpayments can be made up to the equivalent of 20% of the monthly repayment without incurring an ERC.

Head of mortgages at HSBC, Martijn Van der Heijden, said ‘Base rates don’t have much further to fall, so demand for longer term fixed rate mortgages is increasing.’

HSBC also has a market leading two year fixed rate mortgage available at 2.99%. According to HSBC this has resulted in a significant rise in the number of mortgage applications the bank is receiving.

Martijn van der Heijden however also commented that ‘Anyone looking to take out our ultra low 2.99% two year fixed rate needs to move quickly as it is only guaranteed to the end of the month.’