HSBC cuts mortgage rates across its entire loan-to-value range as lender price war rumbles on
- Bank cuts rates across its entire LTV range, reducing 31 different deals
- 95 per cent LTV two-year fix becomes one of the cheapest on the market
- Lenders continue to battle it out as smaller players get squeezed out
HSBC has slashed the rates on its fixed and tracker mortgages across its full range of loan-to-value deals, now offering what it claims are some of the best rates on the market.
The changes include lower rates on 31 different mortgages. Among these, the bank has cut its 95 per cent LTV two-year fixed rate by 0.1 per cent taking it to 2.99 per cent from 3.09 per cent.
Other highlights include a 0.1 per cent cut to the bank’s 90 per cent LTV five-year fix to 2.29 per cent with a £999 fee, a 0.06 per cent cut to its 90 per cent LTV two-year fix to 2.09 per cent with no fee, and a 0.06 per cent cut to its 60 per cent three-year fix to 1.99 per cent with no fee.
HSBC has slashed fixed and tracker mortgage rates across its full range of loan-to-value deals
How do the new deals compare?
HSBC’s higher loan-to-value mortgages are very competitive, but not quite the cheapest on the market.
For example, Nottingham Building Society has a two-year 95 per cent fix at 2.89 per cent, with a £999 fee.
Even with the fee, on a £200,000 mortgage taken over 25 years this deal would be £10 a month cheaper than HSBC’s 95 per cent offering.
The group’s 2.29 per cent five-year 90 per cent LTV deal also fares well, although again there are cheaper options already on the market.
Coventry is offering a five-year 90 per cent LTV deal at 2.25 per cent with a £999 fee, while First Direct (also part of HSBC) is offering a five-year 90 per cent LTV deal at 2.25 per cent with a £525 fee.
HSBC’s reduced 60 per cent three-year fix at 1.99 per cent doesn’t look quite as good as its higher LTV deals when you look at what’s already on offer from other lenders.
For example, Coventry has a three-year 65 per cent LTV deal at 1.65 per cent, with a £999 fee.
On a £200,000 mortgage taken over 25 years, this would be around £32 a month cheaper.
Santander also has a cheaper three-year 60 per cent LTV deal, at 1.69 per cent, with a £749 fee.
Lenders continue to cut rates as smaller lenders are squeezed out
While rates are not quite at the rock bottom they hit at the tail-end of 2017, historically they are still very cheap; the average two-year fix stands at just 2.52 per cent, according to Moneyfacts.
But the past month has shown the first signs of competition taking its toll on some of the smaller lenders, with Secure Trust, Fleet Mortgages and Amicus announcing this month that they would stop lending to new customers.
Paul Lynam, chief executive of Secure Trust, said: ‘Market pressures show no sign of abating, with competition intensifying.
‘We are proposing to cease origination of new mortgage business until conditions become more favourable.’
Last week Coventry Building Society came under fire for slashing its savings rates as a result of its increasingly competitive mortgage pricing.
What else has happened to mortgage rates this month?
Barclays has cut its 80 per cent LTV five-year fixed remortgage product to 1.95 per cent.
The deal carries a £999 fee, which can be added to the advance of the mortgage.
An incentive package of free valuation and free legals is included, and the deal allows over-payments of up to 10 per cent.
Hanley Economic Building Society has released a new five-year fixed rate 95 per cent mortgage deal at 3.39 per cent.
The deal has no fees and includes free valuation. Overpayments of up to 10 per cent are allowed.