HSBC has launched the lowest ever five-year fixed-rate mortgage at 2.99 per cent fixed for five years but there is a catch, buyers will need a 40 per cent deposit or equity.
HSBC is also offering its lowest ever seven-year fixed-rate mortgage at 3.99 per cent. Both products have a £1,499 booking fee.
“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,” said Peter Dockar, head of mortgages at HSBC.
“This is the lowest ever five-year fixed-rate to come to the market and with the security of our retail deposit funding we are committed to offering competitive rates to benefit our customers with what is for many, their largest monthly commitment,” he added.
According to the Council of Mortgage lenders, a typical first-time buyer puts down a 20 per cent deposit on their first home, while a home mover, somebody who is selling one property to buy another, puts down 30 per cent.
Banks and building societies usually charge higher rates for those putting down smaller deposits, than those with large deposits, because they say the risks are higher.